SP500 Futures Trading Plan for 4/17/24
Recap: In the plan for today, I was looking for support at 5088 at the green channel. The market moved down to this level and turned in a good entry signal so I entered long. I was able to begin to de risk as the market moved higher, but this ended up stopping just a few points before the next target before a rapid 20-point selloff stopped out my remaining contracts. There’s nothing I would have done differently for this trade, it just didn’t work out.
This selloff broke through the support level at 5088 but found buyers and reversed at the overnight low. Once it recovered the support level again, I took this trade again and held for hours, but opted to exit at a gain before Powell began speaking.
Balance/Trend: Price broke out from the five month rising trend channel earlier this month and has begun to pull back. The move lower accelerated this week as bears broke price out from the red channel that we’ve traded in this month and from the balance area established in February and March. Though the trend up is no longer moving at the same rate that it was these last five months, bulls remain in control on longer timeframes as price now trades within the yellow trend channel.
Analysis: Despite quite a bit of volatility today, there was not a big change in the daily price and the profile indicates a balanced session. The last mile of inflation has been a tough battle and markets have reacted accordingly: yields are at five month highs, traders are pricing in just a single rate cut this year (possibly a second, but indecisive), and asset prices have pulled back from the highs. Bears are now in control in the short term and bulls will want to at least recover the red trend channel to take back some of the bearish momentum. For their part, the next support for bears to take down lies at the green channel which, if lost, could provide a fresh bout of selling.
Detailed Trading Plan & Charts