SP500 Futures Trading Plan for 4/19/24
Recap: I wrote in the plan that “Since bulls forcefully reversed today’s auction lower at precisely that spot illustrates that they continue to see a discount to value at 5050, so I want to carry it forward as a level to watch”. We got a decent entry signal there, which I cover briefly below, and so I entered long in the mid 5060s. I captured profits at yesterday’s POCs ~5072 and left a runner with a trailing stop which I closed at the next level up at 5084-85.
Intraday volatility has been excellent lately and has given multiple trading opportunities per day. The market continued higher to the next resistance level at 5096 where it again reversed. I wrote in the plan that “There’s an intraday level in the profile at 5096-97…This could be traded on a standalone basis with a good signal, though I much prefer that price move back below the green channel to short it.” Once price got below the green channel at 5085, there was excellent continuation to the next level down at 5050.
Balance/Trend: While long term trends are still up, the intermediate ones (up) have broken and the market is one time framing lower for five consecutive days and soon to be three consecutive weeks. Bears have all the momentum right now as the clear pullback channel in red was lost and the move lower has accelerated in recent days. I’ve connected this series of lower lows and highs with pink lines to illustrate the downturn against the previous red channel.
Analysis: The move back inside of the green channel yesterday was backtested today when bulls briefly tried to break back out of that trend and failed. Sellers were especially active at 5096 yesterday and appeared there again today to push price to new (nearly) two-month lows. With bears clearly controlling the market, we’re now 300 points off the highs and just 250 points to the 200 day moving average, which hasn’t touched since November 3. Economic data continues to show that the US economy is very strong and new GDP estimates support this, stoking inflation fears and swiftly eliminating hopes for rate cuts. For any relief for bulls, they will first need to recover the green channel and then try to break the market back into balance and repair the poor structure in this week’s profile. If they’re unable to do this, there’s still plenty of room to fall.
Detailed Trading Plan & Charts