Last week the Nasdaq finished the month of April down 13.56% after closing 3% or more lower for four consecutive weeks in a row. The Nasdaq closed on Friday 141 points below the March 15th low at 12802.5 dropping 602 points on the final trading day of April. This marked one of the worst monthly losses for the Nasdaq on record. Price made 3 consecutive 600+ point moves dropping sharply on Tuesday and then bouncing sharply on Wednesday and Thursday only to be sold off again on Friday closing almost at the absolute low for the week. Notably price was rejected hard at the 9 ema several times suggesting that market participants were very aggressive in selling into resistance. Price now sits below the Mar 15th pivot low and below the longer term 236 Fib retracement measured from the 2020 Covid low.
Going into this week my bias is bearish. From a technical perspective the setup is a challenging one to read. Price has formed the dreaded H pattern. Although lower prices are expected given the weak Friday close below the Mar 15th pivot price can reverse hard from this setup. The key zone to watch is around the green support zone above 1.13 fib extension. If a breakdown fails, it often happens in this area. If price pushes down through the 1.13 fib extension, I will expect a move lower to the 1.27 Fib extension and the 12207 Mar 5th pivot low. A full compound corrective move to the 1.618 fib extension is possible which would take price down to 11685. If price manages to reverse and move higher expect resistance at the 9 ema and then the tan Neutral box above.
Next week we start a new month, and the news cycle will focus heavily on inflation data and the FOMC statement/rate decision on Wednesday. Much of the selling last week can be attributed to fears related to what the Fed meeting will reveal. A 50-basis point rate hike is expected but the market fears a continued hawkish tone. Any softening of the hawkish tone could lead to a massive rally. Following the FOMC the week wraps up with Non- Farm payroll data which can also be market moving. This will happen with the backdrop of earnings season. Suffice to say it will be another interesting week. It is impossible to predict how the market will react to these events so the best tactic is to keep trading time frames short and positions small as a harsh reversal may a happened at any time. It very much continues to be a trader’s market.
If you find my posts helpful please give me a like. Follow me on Twitter @Sea2Sky_Trader for more updates.
Here is a link to my Substack of this post with more data: nine21.substack.com/...100-weekend-look-f36
WEEKLY EVENTS
Monday US ISM Manufacturing PIM
Tuesday US Factory orders & ECB Lagarde speaks
Wednesday FOMC Statement & Rate decision, ISM Non-Manufacturing PMI, EIA Crude Inventories
Thursday Jobless Claims
Friday Non-Farm Payrolls & Average Earnings
NOTABLE EARNINGS
Monday CAR, CLX, DVN, FANG, EXPE, ANET, MGM, NXPI, NVOM, SEDG
Tuesday BP, BIIB, ETN, KKR, MPC, PFE, AMD, ABNB, SWKS, SBUX,
Wednesday GOLD, CVS, EXPI, MRNA, REGN, YUM, ACAD, APA, ETSY, FSLY, FTNT, MRO, UBER, TWLO
Thursday COP, CROX, DKNG, K, NET, NKLA, NCLH, PENN, RCL, SHOP, W, LCID, SPCE, WPM, NIO, MELI
Friday BEP, ENG, FLR, UAA, BLDP
BULLISH NOTES
Potential H pattern reversal
Potential softening of hawkish tone during FOMC
Positive earnings momentum
Yield reversal
PMI data points to peak inflation
Oversold conditions with VIX +30 & Put/Call + 1
Beginning of the month inflows
BEARISH NOTES
Friday’s close was below Mar 15th pivot
Potential hawkish surprise during FOMC
Negative earnings momentum
Yields continue move higher
PMI data point to continued inflation
PUT gamma squeeze from short term traders
Continued weakness in Mega caps
Going into this week my bias is bearish. From a technical perspective the setup is a challenging one to read. Price has formed the dreaded H pattern. Although lower prices are expected given the weak Friday close below the Mar 15th pivot price can reverse hard from this setup. The key zone to watch is around the green support zone above 1.13 fib extension. If a breakdown fails, it often happens in this area. If price pushes down through the 1.13 fib extension, I will expect a move lower to the 1.27 Fib extension and the 12207 Mar 5th pivot low. A full compound corrective move to the 1.618 fib extension is possible which would take price down to 11685. If price manages to reverse and move higher expect resistance at the 9 ema and then the tan Neutral box above.
Next week we start a new month, and the news cycle will focus heavily on inflation data and the FOMC statement/rate decision on Wednesday. Much of the selling last week can be attributed to fears related to what the Fed meeting will reveal. A 50-basis point rate hike is expected but the market fears a continued hawkish tone. Any softening of the hawkish tone could lead to a massive rally. Following the FOMC the week wraps up with Non- Farm payroll data which can also be market moving. This will happen with the backdrop of earnings season. Suffice to say it will be another interesting week. It is impossible to predict how the market will react to these events so the best tactic is to keep trading time frames short and positions small as a harsh reversal may a happened at any time. It very much continues to be a trader’s market.
If you find my posts helpful please give me a like. Follow me on Twitter @Sea2Sky_Trader for more updates.
Here is a link to my Substack of this post with more data: nine21.substack.com/...100-weekend-look-f36
WEEKLY EVENTS
Monday US ISM Manufacturing PIM
Tuesday US Factory orders & ECB Lagarde speaks
Wednesday FOMC Statement & Rate decision, ISM Non-Manufacturing PMI, EIA Crude Inventories
Thursday Jobless Claims
Friday Non-Farm Payrolls & Average Earnings
NOTABLE EARNINGS
Monday CAR, CLX, DVN, FANG, EXPE, ANET, MGM, NXPI, NVOM, SEDG
Tuesday BP, BIIB, ETN, KKR, MPC, PFE, AMD, ABNB, SWKS, SBUX,
Wednesday GOLD, CVS, EXPI, MRNA, REGN, YUM, ACAD, APA, ETSY, FSLY, FTNT, MRO, UBER, TWLO
Thursday COP, CROX, DKNG, K, NET, NKLA, NCLH, PENN, RCL, SHOP, W, LCID, SPCE, WPM, NIO, MELI
Friday BEP, ENG, FLR, UAA, BLDP
BULLISH NOTES
Potential H pattern reversal
Potential softening of hawkish tone during FOMC
Positive earnings momentum
Yield reversal
PMI data points to peak inflation
Oversold conditions with VIX +30 & Put/Call + 1
Beginning of the month inflows
BEARISH NOTES
Friday’s close was below Mar 15th pivot
Potential hawkish surprise during FOMC
Negative earnings momentum
Yields continue move higher
PMI data point to continued inflation
PUT gamma squeeze from short term traders
Continued weakness in Mega caps
Comment:
Here is a look at the pattern I'm wrote about. Basically a decision point setup. Leans bearish but can rip the other way quickly so hard to play until the move happens.
Comment:
The NAS bounced from the 1.13 fib extension zone and will now likely trade in a range between the recent low and the 9ema leading up to the FOMC rate decision.
Comment:
So far positive reaction to Powell's press conference. Nice move as soon as he said a .75% rate hike was off the table. Still plenty of overhead resistance above as price comes into the neutral zone. The close will be important.
Comment:
Completely rejected at this downward trendline just below the bottom of the neutral box... It appears the move yesterday was mostly short covering. Price will need to break through the downward trendline before moving higher. .
Comment:
Broke below the 1.13 fib extension this am but reversed quickly. A close above the 1.13 would be positive. The weekly close today will be important. Currently NAS is only down 10 points on the week despite the wild price action.
