Submitted by DaddyDersch t3_z79ctj in wallstreetbets
Well the bulls came out swinging for about 15minutes and then after that the bears were in control all day. I called out this morning based on volatility that we could see 395 today… we had such a massive gap after that 399.2 support that it was the natural place we should move to.
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Interestingly enough… after 393.7 support if we lose that volatility wise we have no real established support area until all the way down to 373.7. Could we be headed for a CPI gap fill over the next few weeks?
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I believe we have quite the bear case forming here on spy with a smaller bull potential. But lets take a look at what we have here now…
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Looking at SPY daily here I called out on Friday that I suspected that tiny gravestone doji double top rejection at 402.4 would open up the downside for today and I was correct. I should have played weekend swing puts but I was happy to sit cash as the weekends are pretty unpredictable as of late.
Bear case- today we opened red and attempted to retake the daily 200ema however was unable to, we broke the 3+ week long daily rising wedge pattern and we closed below the daily 8ema for the first time since the day before CPI.
Bull case- despite the rejection and closing under the daily 8 and 200ema we did bounce pretty hard off the key support range of 395 to 395.5 today. We are still maintaining that key lower support range of this consolidation pattern that SPY has been in since November 11th.
For me this breakdown shows that we have a potential to retest 390.1 support and potentially even lower depending on what JPOW says on Wednesday and depending on what all the economic data comes in at. I am bearish until we touch 390.1… If we touch and bounce off 390.1 again then I am seeing a nice consolidation channel from 390.1 to 402.5 and will play it at such. However if we break through and close under 390.1 then I am looking for at minimum the gap fill at 381.2.
Key support- 396 -> 392.6 -> 390.1
Key resistance- 399.2 -> 402.4
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Much of the same case here on futures breaking that rising wedge. However, futures is still holding over one of the key support levels of 3970. If we see futures lose 3955 then I would feel confident in a 3910 retest of support. However, if futures can break back over 4000 we can start talking about a retest of 4020 and then 4040.
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Tesla has the biggest bearish case of them all in my opinion when we look at the daily chart. We had that green support line that was 3 days long until today. That line was broke through today we also failed to even reach the falling wedge resistance line before we retraced. With this gravestone doji closing at Fridays candle body support of 182.9 this should open up some pretty large downside tomorrow. The only real bullish case I see for Tesla right now is that it did recover and close back over its daily 8ema EOD.
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Last week I shared with you guys that tesla had a pretty uniformed drop and recovery cycle. I was seeing that we were averaging a drop of about 6.8 days for 17.82% while the recovery was about 4.5 days of 12.08%.
With todays new short term high we officially put in our 4th recovery day and reached 13.4% total recovery.
If we are trusting this trend that has been playing out for 3 months now that means we should expect about a 7day sell off of about 17.82% which puts Tesla at 154.9 around December 7th.
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If we play out the falling wedge here by December 7th we could see 148.7 which is a total drop of 21.2%. However if we play out the % drop of 17.82% but not the number of days it took to get there we could see by November 30th (2 days) a touch of the red support line at 154.5.
Realistically I would look for a test of support near 148-155 in the next 4-7 trading days. Biggest support to break through though will be that 166.2 level.
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I don’t love post weekly charts so early in the week but we did break through the blue resistance line of this current downward trend today. However we immediately rejected and hard rejected off the weekly 200ema. Key support for this weekly timeframe is 180.1. This current bear channel (thick red support line) gives us intraweek support of 154 and next week support of 152.
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As much as I was looking for that 19.7 touch this week it appears that as of now we may not get it. We officially closed over the daily 8ema for the first time since October 14th. We are still in this bear channel though and its not quite time to get super excited but this is not a bad time in my opinion to start adding to some 30-60dte put positions.
$5k/ 10% challenge-
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Was able to get a nice put scalp in this morning for the $5k challenge. Still haven’t quite been able to get any good big scalp wins but I also don’t want to stretch these plays out. This is one of those times where if I had a standard position size (usually $2000 for me) I would sometimes hold a little longer but with this larger bigger $5000 position I am more apt to quickly take profits and to take the first hit of profits.
This is where the emotional side of trading comes in.
Daily log-
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Overall not a bad day and a great way to start the week off. Almost love starting the week off with a nice green day. Scalps were on fire today even if I closed them all early AF only for them all to 3-4x right after… but profit is profit!
Some struggles with the level to level plays this morning. The first SPY put I played the bounce off 399.2 support however it was a fake bounce and broke down pretty quickly and I got out. I was just unfortunately too early on that first Tesla put and got stopped out before it saw green.
Not a bad day.
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Looks like a lot of you found green today too!
Hope you guys had a great day! See you guys tomorrow!
YOUTUBE will be up later!
RepulsiveStill177 t1_iy5fqgm wrote
Informative - Ty