Discover more from JR88 TRADING SUBSTACK
CPI day August 10th, 2023
SPX continues to make new lows headed into CPI
Over the weekend I gave 4514 on $SPX as the pivot which determined control between bulls & bears.
Key Levels: 4514 will be the key level for the week.
Bearish Trajectory: If bears hold below 4514 then pullback continues towards backtest zone at 4474 and gap fill at 4443. If below 4443 can target 4425 and 50sma at 4406.
So far this week we have had a range of 4519 and 4467. Once 4514 was taken out it has been lower lows each day demonstrating that bears are in control below that pivot level.
For tomorrow - it’s clear there will likely be traps in both directions. I drew out this wedge in orange, anything inside that is just noise. Unless there is a break either to the upside or outside of that, expect more choppy conditions similar today.
IMO everyone has their eyes on the unfilled gap at 4443 on SPX. Most are also expecting a bounce at this level. I have to recommend that you continue to scalp and take things day by day only instead of trying to predict what will happen.
The leaders so far in the movement such as TSLA 0.00%↑ MSFT 0.00%↑ NVDA 0.00%↑ NFLX 0.00%↑ have all retraced to their 50SMAs. As you can see on this chart, SPY still has a long way to go for that. The 8ema is curling down and likely the 8ema will want to retrace to the 50sma to either crossover and start a large downward move, or to bounce off of it and head to ATH.
With that being said 4514 will continue to be the pivot for the rest of the week - there is no real rally until that clears. If that clears then SPX will head higher to the unfilled gap around 4570. For the downside, want to see a fail at the 50SMA for any real downside. 50SMA is at 4427, we are currently at 4467, its only 40 points away. The NQ tapped it’s 50SMA, bounced, then tried it again and failed. SPY/SPX/ES may see the same action.
A reminder of VIX seasonality:
In the discord we have been doing futures more often - as it takes away the complexity of options and is better in choppy conditions. These alerts look like this and will be posted more frequently moving forward:
We try to do scalps, but in a way that it’s an intraday swing that others can actually follow, vs quick minute scalps on extreme overbought/oversold candles that are unlikely to be reproduceable.
With that taken care of I want to point a few things out as well that i did not cover on the weekend newsletter.
Keep your eyes on this wedge. MSFT started the entire downtrend/pullback and has been the leader. The decision of this wedge will affect the rest of the market. Also, will decide the next $20 move.
Trading in a wedge below the original rising wedge. And its breaking down ahead of CPI. If this is red tomorrow this can be a good scalp to the unfilled gap below.
The 8ema has just crossed under the 50SMA and if this does not get back up to 256 tomorrow, it’s likely headed to the gap at 221 as well.
More updates to follow on the weekend newsletter.
Best regards, Jovan
Jovan’s Weekly Substack is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.