March 20, ES Plan and Missal: Slow Dance
FOMC Wednesday
Image 1. Still going. Pollack, They Shoot Horses Don’t They (1969)
In this surreal film, two characters desperate to make it in Hollywood meet and enter a dance competition for a cash prize - to the last couple standing. But two days in with no rest off the dance floor, is it better to continue suffering or just give in… even if that means on life, too?
Some participants in this market will relate as this continues to be an unforgiving space for the shorts since October. Today’s example was a gap down with no continuation on the sellers’ behalf, once through open the day pushed back not only through the gap but through the entire previous day’s range on the close.
If you enjoy my plans and educational content, you can show your support by donating a ko-fi to the link/QR below! All my work remains free. However a token of support goes a long way to letting me know I’m helping your trading and understanding of a (now hopefully less) complex market. Comments, likes, retweets and sharing with your friends is greatly appreciated.
Minister’s Missal
This is not a formal plan ahead of FOMC which promises to bring volatility. While there has been some chatter of potential rates hikes (suddenly after months of ‘pivot talk’), Powell has no more room to raise rates ahead of the election. I would argue that his ability to defer lowering rates is even curtailed to an extent.
Indeed once the day was over my 5208 pivot, we did not look back, closing the day nearly 40 points higher. Note the day began and ended to the inverse of Monday - a gap down versus a gap up, and a close higher rather than lower. This positioning is not surprising ahead of a major event.
Image 2. Daily profiles, ES
The day left poor structure albeit an outside day, with three sets of singles and a ‘p’ shape indicative of some absorption.
Buyers now look to break the PWH into new ATHs to capitalize on the outside day and mid-week momentum. I suggest some levels to target above on strength. Sellers meanwhile look to defend from trade above 5250. A lack of buyer commitment (volume) could see sellers take advantage of better prices, first targeting Tuesday’s poor structure to 5212 before potential initiation to lower targets.
Wednesday Plan and Levels
Pivot 5233 - or the six-day balance POC. FOMC at 14h00EST and Powell presser at 14h30EST.
a) Support at the pivot and an hourly close above 5247 targets 5256-58 where sellers may step in, with momentum potentially targeting 5271 to 5278 above. High volatility could open further targets 5285 and 5295.
b) Time below pivot and a break of support at 5226 targets 5212, 5207-5202, with further support at 5191 and 5183. A full liquidation could target 5171.
c) Again maintain awareness of VIX stalwarts - below 13.90 and above 15.00 for buyer and seller strength, respectively. AAPL at 175 this time can support indices, while TSLA could see support at 170 early on for tests of 176.
Any updates will be shared premarket and intraday.
Have I improved your trading? This journal remains free, but you can support my work , by liking and commenting, sharing my work with friends or on Twitter - and certainly directly with a contribution. I appreciate your support: it keeps my publication ongoing and timely!
Tip jar
Be sure to follow me @rareverend on X (Twitter) for the latest updates.
Don’t maintain bias in the face of contradicting information! Capital preservation is key.
This is CERTAINLY not investment advice and I am not a qualified licensed investment advisor nor a minister of the church. All information found here, including any opinions, commentaries, jokes, outright mistakes, and suggestions - expressed or implied herein - are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be as accurate a picture of trade as I see it, it is after all how I see it and errors or inaccuracies are practically expected. I will not and cannot be held liable for any actions you take as a result of anything you read here. As always, conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.