Weekly Charts Reading for 6/03- 6/07

Fresh Month: Bullish or Choppish?

Jun 02, 2024

Today's newsletter is a condensed version. Please let me know if it's still helpful

How’s last week?

Last week's report, titled "Short Week, Key Moves," anticipated significant market moves. Did the market deliver as expected?

#ES: After failing to break above 5340 on Monday, it declined for four days, found strong support at 5205, and bounced back to close near 5298.
#NQ: Monday’s close above 18930 hinted at a bullish trend, but a quick reversal from 18950 on Tuesday led to a sharp decline until Friday afternoon. It found support near 18230 (18241.25) and recovered swiftly.
#RTY: Bears held 2101 on Monday (with bulls unable to reach 2094), causing a strong decline on Tuesday and Wednesday. A robust bounce on Thursday closed above 2056/58, followed by solid performance on Friday.
#YM: It hit neckline support at 38110 (from the weekly M pattern) and rebounded strongly on Friday.
#DXY: Although it closed slightly down for the week, it’s still holding above the daily trendline support. As mentioned, bears need a weekly close below 103.880 or start with a daily close below that level to regain control.

Overall, the market continued to offer expected bi-directional trading opportunities.

Read here how I use this Weekly Newsletter in my daily trading

Given the abundance of numbers in this newsletter, there's a chance I might make a typo. If you spot any errors, please give me a heads up. Thanks a bunch!

Week Ahead (6/03 – 6/07)

With the start of the new month, we can expect continued two-way trading opportunities this week.
An initial move down followed by an upward move is ideal for bulls.
Next week is busy with key economic reports, likely causing market volatility.
Overall, all four index futures closed the month in the green.
#YM and #RTY: Bulls have a shorter range to maintain momentum, so shallower dips are essential for continued upward movement.
#ES and #NQ: These have a bit more room for pullbacks while still maintaining the monthly bullish momentum.

Note about levels above ATH
Upside targets are estimated without left-side confirmation on the chart, utilizing a combination of Fibonacci and trend lines across multiple time frames. Feel free to reach out if these levels prove effective; otherwise, your understanding is appreciated.
These levels are subject to refinement as prices evolve throughout the days.
In the event of new highs, prioritizing profit-taking based on risk-to-reward multiples is recommended, rather than waiting for specific target levels to be reached.

Feel free to scroll down to the end of the report to get a rundown on some of the terms I'm throwing around, like "hold," "claim," and “fail”

Events Calendar:

Next week is packed with events that could significantly affect market volatility. Starting Monday, daily economic reports will be released, each with the potential to impact the markets.

Note about charts:
Check out the daily chart links provided for a closer look at the detailed levels.

#ES_F / $SPX Futures:

📈 Weekly: caution 🐂 📊 Daily: caution 🐂

Analysis:

Second consecutive red close on the weekly chart.
Strong green close on Friday.
Friday's green candle closed just above last week's first key support level of 5298.
Maintaining a bullish bias on weekly and daily charts as long as 5250 holds on the daily. The last defense level for bulls is 5217.
Note: The monthly close is also strongly bullish.
Bulls should ideally hold 5294/89 on Sunday/Monday and quickly move to claim 5324, then consolidate between 5333-5296 before pushing to 5349 and beyond to 5366/77+.
Above 5268, bulls maintain momentum.
Below 5250, bulls enter the pain zone.

General Trade Plan for Long Trades:

If 5296 holds and 5329 is claimed, target 5340/5349 next.
If 5349 is claimed, target 5366/5377 next.

General Trade Plan for Short Trades:

If 5250 fails, expect 5217/5209/05 to be tested.
If 5205 fails, target 5195/89 next.
If 5189 fails, target 5166/5155 next.

As always, trade level to level.

Yearly View:

🐂 Bullish: Hold above 4420/4350 for focus on 5615/6110+.
🐻 Bearish: Monthly trend will dictate the bearish stance.

Monthly Viewpoint:

🐂 Bullish Goal: as long 5185 holds/reclaimed, 5370/5445 in focus (almost hit 5370 last week)
🐻 Bearish Goal: as long bears hold 5215, 4815/4805/4702- in play (invalidated)

Weekly Perspective:

🐂 Bullish: If 5294 or 5268, 5250 holds and claims 5333, 5349/5366/5377+ in play
🐻 Bearish: If 5250 fails, 40/17*/09/02*- in play.

🔑 Key Levels:

Resistance: 5305, 5310*, 5324/29*, 5340*, 5349*, 5358, 5366*, 5377*, 5387, 5392*, 5400, 5409*, 5417*, 5430, 5438, 5445*
Support: 5294/5289*, 5273/5268, 5260, 5250*, 5240/37*, 5231/27, 5217**, 5209/5202*, 5195*/5189*, 5182*, 5166*, 5156, 5146, 5130/5127*

Red Flags:

Keep an eye out for potential signs of a bearish reversal on red days:

As price didn't move significantly, keeping flag levels unchanged

Orange Flag: Close below 5266 questions the daily uptrend.
1st Red Flag: Close below 5217 suggests a potential shift in the short-term weekly uptrend bias.
2nd Red Flag: Close below 5099 indicates possible voiding of the short-term weekly uptrend bias.

#NQ_F / #NDX Futures:

📈 Weekly: cautious 🐻 📊 Daily: Cautious 🐻

Analysis:

First significant red weekly close after five consecutive green weeks.
Changing bias to bearish but adding caution since Friday closed just above key support at 18568.
Note: The monthly close is still strongly bullish.
To see bulls' commitment, 18545 or at least 18515 needs to hold, and 18655 should be claimed by Sunday/Monday.
Bulls must defend 18410 in any deeper pullback.
Above 18480, bulls maintain momentum.
Below 18410, bulls enter the pain zone.
Bears need to hold 18750/790.
A daily green close above 18790 boosts bulls' confidence and control.
A daily red close below 18410/390 strengthens bears and could trigger a quick drop.

General Trade Plan for Long Trades:

If 18545/515 holds and 18655 is claimed, target 18705/18750/18790 next.
If 18790 is claimed, target 18875/18950/18985 next.
If 18985 is claimed, target 19135/19170 next.

General Trade Plan for Short Trades:

If 18480 fails, expect 18410/390 to be tested.
If 18410 fails, target 18290/18240 next.
If 18240 fails, target 18160/130 next.

Stick to trading level by level as usual.

Yearly View:

🐂 Bullish: Maintain above 14265/14140 for focus on 20320/22640+.
🐻 Bearish: Monthly trend determines the bearish stance.

Monthly Viewpoint:

🐂 Bullish Goal: as long 16690 holds, 19035/19710/20190 in play (in play)
🐻 Bearish Goal: Bears holding 18350 or at least 18150 may target 16690/16470/16350- (invalidated).

Weekly Perspective:

🐂 Bullish: If 18545/515 holds and 18655 reclaimed, 18750/18790/18950/985*+ in play
🐻 Bearish: if 18515 fails to hold, 18480/410/390*/290*/240*- in play

🔑 Key Levels:

Resistance: 18620/18655*, 18705, 18730, 18750*, 18790*, 18815, 18835*, 18875, 18910, 18950*, 18980*/19005, 19035*/19075*, 19115, 19170
Support: 18568, 18545*, 18515, 18480*, 18410*/390*, 18350, 18290*, 18240, 18160/130*, 18105, 18050*, 17990*, 17930, 17890*

Red Flags:

Keep an eye out for potential signs of a bearish reversal on red days:

Moving flag levels up than usual for early detection of trend change

Orange Flag: Close below 18620 questions the daily uptrend.
1st Red Flag: Close below 18390 on a red day may suggest a shift in the short-term weekly uptrend bias.
2nd Red Flag: Close below 18160 on a red day may indicate potential voiding of the short-term weekly uptrend bias.

#RTY_F / #RUT Futures:

📈 Weekly: Cautious🐂📊 Daily: Cautious 🐂

Analysis:

After the previous red week, bulls stepped in at 2033 Wednesday night and closed Thursday above the key 2056/58 level.
Bulls followed up with a strong green close on Friday, ending the week marginally green.
After April's red month, May closed green, pausing the bearish momentum.
Changing daily and weekly bias to bullish but adding caution as Friday's high hit the overhead resistance trend line, and #DXY hasn't shown bearish movement yet.
Once the daily resistance clears, expect more bullish momentum to test 2101 & 2111+.
Above 2067, bulls maintain momentum.
Below 2062, bulls enter the pain zone.
Bears need to hold 2098/2101.
A daily green close above 2101 boosts bulls' confidence and control.
A daily red close below 2050/2041 strengthens bears and could trigger a quick drop.

General Trade Plan for Long Trades:

If 2075.5/2067 holds, target 2101/2111 next.
If 2111 is claimed, target 2119/2124/2130 next.
If 2130 is claimed, target 2141/2150/2161 next.

General Trade Plan for Short Trades:

If 2062 fails, expect 2053/2050 to be tested.
If 2050 fails, target 2041/2035 next.
If 2035 fails, target 2024/2019 next.

Same as last week:

Above 2062, bulls remain hopeful.
Below 2056, bulls enter the pain zone.
If bulls successfully defend 2062 and reclaim 2111, last Thursday's low could mark a higher low, with 2169/2209 as the next target.

Yearly View:

🐂 Bullish: Holding above 1867 targets 2247/2461/2575+.
🐻 Bearish: Monthly trend determines the bearish stance.

Monthly Viewpoint:

🐂 Bullish: as long 2053/2032 holds or reclaimed 2247/2300+ in play (still in play)
🐻 Bearish Goal: Bears holding 2058 or at least 2036 may target 1905/1810 (invalidated)

Weekly Perspective:

🐂 Bullish: If 2067/2062 holds and 2101 reclaims, 2111/2119/2124/2030*+ in play
🐻 Bearish: If 2050 fails, 2041/2035/2024- in play

🔑 Key Levels:

Resistance: 2085*, 2094.5*, 2098, 2101*, 2111*, 2119, 2124*, 2130*, 2141.5, 2153.5*, 2163/2169*, 2176.5, 2190*, 2198, 2209.5
Support: 2075.5*, 2067, 2062*, 2058, 2055.8, 2050*, 2041, 2035*, 2024, 2019*, 2012*/2009, 1998*/1991*, 1985*, 1978*/72*, 1965, 1958*

Red Flags:

Keep an eye out for potential signs of a bearish reversal on red days:

Keeping flag levels closer than usual for early detection of trend change

Orange Flag: A close below 2094.5 questions the daily uptrend. (triggered May 22nd)
1st Red Flag: A close below 2058 on a red day may hint at a shift in the short-term weekly uptrend bias. (triggered May 23rd)
2nd Red Flag: A close below 2047.8 on a red day may suggest potential voiding of the short-term weekly uptrend bias.

Note about Terminology:

In my weekly reports and X (Twitter) posts, I often refer to terms like "must hold," "claim," or "fail." Here's a quick explanation of what these terms mean:
For intraday analysis: I consider the 15-minute or 1-hour candle close.
For trades spanning overnight to two days: I focus on the 4-hour candle close.
For a weekly or longer-term outlook: I rely on the daily candle close.
close above: claimed / close below: failed
These references are also available in the pinned thread on my X profile. I strongly recommend reading that thread for a deeper understanding of my chart analysis. While I plan to elaborate on my methodology in a separate Substack post in the future, the pinned thread on my X profile offers valuable insights for now.

Read this thread on X to learn about hold/fail/claim/reject setups that worked

Curious about your trading experiences. Share your trading moves inspired by this newsletter – the wins, the almost-wins, and the lessons learned. Drop your insights in the comments below or over on X (formerly Twitter). Let's learn and grow together!

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