Submitted by DaddyDersch t3_11ekw5w in wallstreetbets
Well what was looking to be a pretty boring and untradeable day got to be a little exciting there EOD. I actually was very surprised to see bulls push it up like they did middle of the day as most technical did not really support a move like that. However, as seen below a perfectly timed tweet seems to have coordinated perfectly with that massive $3.13 sell off. It is not common that we go coast to coast (HOD to LOD) but we sure did today…
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Actually the most impressive thing is the fact that the final one minute candle dropped a total of $1.2.
To me it seemed like markets were starting to forget about the whole 50bps hike thing and CPI being HOT… However, they were kindly reminded today and that seems to have fueled this sell off here today.
With markets reminded of 50bps we could see a small continuation sell off tomorrow.
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Taking a look at SPY here you can see we have a really nice black bear channel going here. There is also a tighter more aggressive bear channel (red) inside of that. That could very well be a falling wedge. If that is a falling wedge then resistance for bulls to break for an upside push would be 397.4 tomorrow. That level coincidentally enough was MAJOR support almost all day long.
The biggest things to note here is that tomorrow when markets open the daily 8ema will cross below the daily 50/200ema for the first time in over a month. Not only that but today we attempted ot break over the daily 200ema and couldn’t even touch it. Despite bouncing off the 100ema most of the day and yesterday we also closed below that.
I still am eyeing 390 here and hold to that until SPY closes back over 400. We also have an established supply level at 396.42 that we did break back and close under today. This level could turn itself into nice resistance here. We have a large gap on supply back down to 383.81 and upside to 414/415.23. After establishing demand at 400.6 on 2/23 we retested that yesterday and rejected there. We should with that rejection seek on next demand at 388.66 unless we can establish a new demand this week first.
Supply- 396.42 -> 383.81
Demand- 400.62 -> 388.66
Key SPY Support- 396.3 -> 395.4 -> 393.6 -> 391.44
Key SPY Resistance- 397.3 -> 398.5 -> 400 -> 400.6
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Taking a look at ES futures here we actually have an even more bearish looking chart than Spy. I said I was worried that we COULD see a double bottom off that 3975 and that could push us up and that was in the back of my mind. However, bears struck back with another daily 8ema rejection, crossing the daily 8ema below the 50/200ema and closing under the daily 100ema. Now only that but we have a bearish engulfing daily candle here.
Demand was established at 3975 on Friday which could have provided a bigger push up. However, we were not able to the the momentum up and with extreme bear momentum down the 8ema rejected us nicely here. With a presumable close below 3975 here the next target is 3915 demand.
However, Supply wise we had a previous level at 4020 and yesterdays candle resistance now becomes new demand at 3988. With a rejection off supply and also losing demand here I am very much so bearish on futures and I am looking for that 3915/3920 area to be touched. I remain bearish as long as futures is under 4020.
Supply- 3988 -> 4020
Demand- 3975 -> 3915
Key Futures Support- 3965 -> 3945 -> 3920
Key Futures Resistance- 3975 -> 3990 -> 4000 -> 4008 -> 4020
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Tesla had a surprisingly weak showing today. I would have expected more strength today leading into investor day. However, after establishing a supply zone at 207.7 yesterday it attempted to push back to the previous supply of 214.24 and was unable to. With that failure we should start looking for a push down to demand near 196.3. However, with the tsla event tomorrow after hours this could go either way.
Supply- 207.7 -> 214.24 -> 224.75
Demand- 196.29 -> 164.18
Key Tesla Support- 205.6 -> 202.1 -> 197.8
Key Tesla Resistance- 210.7 -> 214.2 -> 219.2
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Kinda surprisingly here is the fact that the VIX did not spike when we had that massive EOD sell off. It id recoil a little bit eod and bounced off its daily 20ema and closed under its daily 8ema… but with a sell off of that size I would have expected more bounce there. That could come tomorrow though. One thing I did note that besides Friday the PC ratio is very low this week on Spy.
Daily log-
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Today was another really great day trading. My only loss came from a put that I cut early on that huge run up. Overall a great day and a great week of trading so far.
This tight $3 range days with slightly elevated IV and extremely wicky/ volatile candles is making trading hard but so far so good. Extra patience in this type of market is always key.
computerlad69 t1_jaen6fj wrote
ty for your continued contributions to the regards that have enough brain wrinkles to read your DD