Macro micro trader

Last week was one of the best weeks for the bulls in a long time, especially considering how bad this year has been. There are calls for a bottom in place and new bull run begun all around on fintwit. But I wouldn’t enter the debate of new bull market or a bear rally yet. I am more interested in making money for the day and coming week. So lets dive straight in:

ES (weekly): As posted on my twitter feed last Friday, this market has been driven by weekly chart all through this year and it would be only wise to take a view on the market based on weekly candles and here is what we see: Sitting right at the cusp of a weekly supply zone of 4125-4260. This entire zone is a no go zone for the bulls and an opportunity for the bears to step in. Not only the supply zone, ES is sitting right above 20 weeks MA too and I would expect markets to respect it and give away some gains. Also, after breaking out of the falling wedge (or the downward channel, whatever you may call it), it needs to backtest the breakout for another sustainable bounce. I would expect sub-4k levels to be retested in the coming days, probably in the coming week itself.

NQ (weekly): Almost similar story goes for the tech index too. Sitting right above the 20 weeks MA and at the weekly supply zone. I would expect 12,200 levels to be retested before bulls can come back in full throttle.

RTY (weekly): The small cap index is in a different tangent altogether. While all the other index futures are on the verge of coming back from the weekly supply zones, RTY is sitting right above the falling wedge breakout line and above 20 weeks MA. Its a tough call to say which way it would go. Although my bet would be that it would not be spared a bear hammer while all the other index futures suffer, it would also be the one that would bounce sharply after the sell-off.

YM (weekly): Yet another index future and yet another similar story – weekly supply zone overhead and 20 weeks MA too not far behind. Expect a sell-off towards 31500-600 zone and then we go from there.

Conclusion: Expect some weakness in the market for the coming days and through the week before bulls can try and stall the bear cartel again. The real worry would be when the 4H and the daily price momentum starts showing negative divergences, which is missing so far. Till then ride the tide the way it goes.