September 13, S&P500 Plan and Missal
Rebid of Hope
Image 1. Varillas de esperanza. With enough liquidity anything is possible
The 2024 market takes no prisoners. We are back in the prior 10 day balance area. With a successful close not only over 5574 (a key weekly target, recall), but a high of 5607 on Thursday put price just short of value area of balance.
The liquidation was just a flash sale ahead of new ATHs.
Crow’s Nest
The PPI came in above expectations, just like CPI - which should not be a surprise. My only surprise is that the deflation narrative took hold so easily (and early), even after printing 7%+ inflation at one point in this cycle. And even that is watered-down data, the reality on the ground - everyday shopping, home owning, insurance - is much more acute. I will expound on the mechanisms (and what I think is a misplaced 2010-style call on deflation) in the Crow Founder note later this quarter.
I will be sharing my own strategy in a dividend playbook for 2025 separately for the Founder birds, so don’t miss that if you’re a longer-term investor.
Image 2. Excerpt from the September 9 weekly Missal.
Image 3. ES balance and daily profiles
Overnight is uneventful with a continued drift up on mixed inventory overnight, with all trade above the PDVA. For the day’s pivot I will use Thursday’s closing M period high of 5605, around the area of the earlier crowded trade which saw inventory correction in K period. Broadly speaking these are mechanical longs, with smart money having accumulated much lower, however they are likely holding out for higher prices to distribute - this is why I will have the balance area POC and VAH on watch for resistance to close out the week.
On the short side, time spent below 5600 will target the K period low and onto the PDPOC which could see renewed buying interested - as long as the balance low does not see a strong close below. That could engage a test of psych level 5550 to 5545 buying tail. I would not expect much more of a sell than that at the close of the week, however further weakness could tempt levels such as 5534 and singles at 5510.
Image 4. ES Wednesday partial RTH to Thursday ETH as of 8h25EST
Friday Plan and Levels
Pivot 5605. As of 8h20EST, the volatility model is estimating 52 points with 11 points possible overshoot.
a) Defensive bid at 5594 (PDVAH), volume over pivot target 5615 / ONH. A break here on momentum look for 5625 to balance POC 5638 which can see inventory distribution. Consider 5647-5650 balance traverse to VVAH (volume value area high) at an extreme.
b) Time below pivot, below 5594 targets 5577, a break on volume to PDPOC 5567. Further momentum targets 5555 to 5545 singles. Least likely scenario targets 5534 and 5510.
c) VIX pivot at 17.20. Selling could be brought with prints over 18.25, with buying favored below 19.00, with further buying potentially lifted with the VIX below , and buyers potentially supported below 16.50.
Image 5. ES 4H levels
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