Trends maxed to the downside; And what is all this about Banks?!
So on Friday I went Long at the close of the day into the weekend. That netted a $2500 trade right away when things opened up into Sunday evening. I cashed out on that, and was pleasantly surprised to see all those gains given up overnight. I then went Long again when we briefly went into negative territory at 3894, and moved up with it slowly, where I was eventually stopped out on the reverse movement at 3914 for another $1000. $3500 before the open of Monday for the week is pretty fantastic. I attempted one more Long here but was stopped out for $50 profit, and at this point I'll just be looking for signs the upward momentum is beginning again.
There is some confusion in drawing trends as the /ESK contract ended and now we are in the /ESM contract. I changed the trend numbers all over to the current /ESM contract, and they are as follows;
Last Macro Trend Signal Spots
30m - 3916 Downtrend (3/10/2023) Lower Low
1Hr - 3886 Downtrend (3/10/2023) Lower Low
2Hr - 4048 Downtrend (3/7/2023) Higher Low
3Hr - 4047 Downtrend (3/7/2023) Lower Low
4Hr - 4047 Downtrend (3/7/2023) Lower Low
6Hr - 4028 Downtrend (3/7/2023) Lower Low
12Hr - 4052 Downtrend (2/21/2023) Higher Low
Daily - 3955 Downtrend (3/9/2023) Higher Low
Weekly - 4366 Downtrend (2/14/2022) Higher Low
The Long Position;
My more likely trading scenario, as we are maxed out in all trends to the downside at the moment. I expect any down movement to have a pop back to the upside. So I will be more or less looking for good entry points that show that upward momentum is beginning, and run it up until it appears it might fail and cash out. We had a significant downward movement Friday with decent momentum, so I don't know that a rally will stick, but certainly I expect an upward spiking whipsaw day at least, even if we end relatively flat.
The Short Position;
This banking thing has many on edge. If we do get a spike up, it could be followed by a strong move back down, and if we hit up against the current lows of the 3890 area enough times, we might just bust through it and head lower for the day, continuing the meltdown we've seen over the last 2 days because of this SVB saga.
Earnings;
Adobe is this week, but otherwise Earnings are still nonexistent.
Economic Data;
We have nothing for today. However, we do have CPI Tuesday and PPI on Wednesday, with more job numbers on Thursday. Should definitely be a wild ride this week. I find it interesting that we are set for a technical bounce just before important inflation data. It means the market is primed for a major spike upward if this data comes in showing inflation is continuing to cool.
Side Note;
If you haven't been checking into the Silicon Valley Bank run, you really need to read into it. Thus far, basically SVB didn't position against the rate hikes very well, they moved to acquire more capital, it got out they needed capital, and this caused a frenzy of withdrawals that ultimately led to the Banks immediate collapse.
The FDIC came in and took the bank over, and initially only deposits up to $250,000 were insured. This is a similar situation that occurred in 2008 during the great recession with Washington Mutual just before 500 other banks also ran into financial crisis.
Therefore everyone had a sudden fear of other banks going under like before, and there has been a mass sell off in Financial related stocks. However, in analyzing things, banks are significantly less interconnected and have to establish better practices to protect against this, and while SVB made a mistake here, it wasn't that it mismanaged anything long term. They just made a single hiccup, so widespread fallout appears to be unlikely.
Additionally, the FDIC has come out and said they will ensure all the money of all depositors, so no one will lose out other than investors. However, the fallout of this may very well force the FOMC to not just keep rate hikes lower at 25bps (it was believed late last week we could go to 50bps), but even pause the rate hike with not even a 25bps hike in order to make sure the financial sector remains healthy in the US.
Certainly trade it as you see fit, but overall I think the panic move on this has most certainly been overdone, and we went about 30-40 points to low on Friday, even for a potential downward move.
My sentiment into today, from 3895, is;
Shorter Term - Bullish
Short Term - Bullish/Neutral
Medium Term - Bullish
Long Term - Neutral
Safe trading, and remember your risk management plan!
There is some confusion in drawing trends as the /ESK contract ended and now we are in the /ESM contract. I changed the trend numbers all over to the current /ESM contract, and they are as follows;
Last Macro Trend Signal Spots
30m - 3916 Downtrend (3/10/2023) Lower Low
1Hr - 3886 Downtrend (3/10/2023) Lower Low
2Hr - 4048 Downtrend (3/7/2023) Higher Low
3Hr - 4047 Downtrend (3/7/2023) Lower Low
4Hr - 4047 Downtrend (3/7/2023) Lower Low
6Hr - 4028 Downtrend (3/7/2023) Lower Low
12Hr - 4052 Downtrend (2/21/2023) Higher Low
Daily - 3955 Downtrend (3/9/2023) Higher Low
Weekly - 4366 Downtrend (2/14/2022) Higher Low
The Long Position;
My more likely trading scenario, as we are maxed out in all trends to the downside at the moment. I expect any down movement to have a pop back to the upside. So I will be more or less looking for good entry points that show that upward momentum is beginning, and run it up until it appears it might fail and cash out. We had a significant downward movement Friday with decent momentum, so I don't know that a rally will stick, but certainly I expect an upward spiking whipsaw day at least, even if we end relatively flat.
The Short Position;
This banking thing has many on edge. If we do get a spike up, it could be followed by a strong move back down, and if we hit up against the current lows of the 3890 area enough times, we might just bust through it and head lower for the day, continuing the meltdown we've seen over the last 2 days because of this SVB saga.
Earnings;
Adobe is this week, but otherwise Earnings are still nonexistent.
Economic Data;
We have nothing for today. However, we do have CPI Tuesday and PPI on Wednesday, with more job numbers on Thursday. Should definitely be a wild ride this week. I find it interesting that we are set for a technical bounce just before important inflation data. It means the market is primed for a major spike upward if this data comes in showing inflation is continuing to cool.
Side Note;
If you haven't been checking into the Silicon Valley Bank run, you really need to read into it. Thus far, basically SVB didn't position against the rate hikes very well, they moved to acquire more capital, it got out they needed capital, and this caused a frenzy of withdrawals that ultimately led to the Banks immediate collapse.
The FDIC came in and took the bank over, and initially only deposits up to $250,000 were insured. This is a similar situation that occurred in 2008 during the great recession with Washington Mutual just before 500 other banks also ran into financial crisis.
Therefore everyone had a sudden fear of other banks going under like before, and there has been a mass sell off in Financial related stocks. However, in analyzing things, banks are significantly less interconnected and have to establish better practices to protect against this, and while SVB made a mistake here, it wasn't that it mismanaged anything long term. They just made a single hiccup, so widespread fallout appears to be unlikely.
Additionally, the FDIC has come out and said they will ensure all the money of all depositors, so no one will lose out other than investors. However, the fallout of this may very well force the FOMC to not just keep rate hikes lower at 25bps (it was believed late last week we could go to 50bps), but even pause the rate hike with not even a 25bps hike in order to make sure the financial sector remains healthy in the US.
Certainly trade it as you see fit, but overall I think the panic move on this has most certainly been overdone, and we went about 30-40 points to low on Friday, even for a potential downward move.
My sentiment into today, from 3895, is;
Shorter Term - Bullish
Short Term - Bullish/Neutral
Medium Term - Bullish
Long Term - Neutral
Safe trading, and remember your risk management plan!
Comment:
Long 3870
Comment:
Set a small stop loss once we got back above 3870 that clearly triggered. Might sit out for a bit here. Though my assessment hasn't changed.
Comment:
I'm sitting here in a Long, in case anyone was wondering, within a few hundred bucks of making $5000 today (including last nights $2500). I told myself if I hit that mark I'm done, yet every time it has gotten close, it falls back lol........ Almost there again. I need about 3932
Comment:
Hit that mark. I see us getting a bit higher. We don't have that 30m uptrend quite yet (it's actually trying for a 15m uptrend). However, with a $5000 day, I'm just gonna walk. I MIGHT take tomorrow off also, which is great cause then I don't have to mess with the CPI data. I'll likely do a video one way or another.