Week of November 13th 2023
Fastest AAII bear to bull conversion, Moody's downgrade, SPX breakout?
Hi everyone!
First - due to some issues on my end with SubStack, this week’s newsletter is public. Next week you will need to be a subscriber, no exceptions.
This past week we saw the exact opposite of the week of October 30th, a narrow trading range the entire week ~ 70pts (4343-4418). This was expected as it is the norm for what comes after a rally and what the market spends the majority of its time doing - basing. I mentioned that bulls reclaimed control temporarily and dips may be bought for continuation into 4400. The first half of the week was a very slow grind up into 4393 before a falling wedge fired us down and we got our first sell of the week and the first red day in a historic 8 green days in a row. That was very short lived and bulls took back control and took us higher to close the week at the highs. However then headlines right after the close make it seem like it was a trap.
The plan from last week will be the same for this week, with the same key levels of 4248 and 4400.
You can see here the price action between the 4248 level and 4400. The 4248 level continues to be key as it is what led to this large rally (failed breakdown). If we were to trade below 4248 again, that would lead to a large sell below 4000.
The range for last week was 4343-4418.
SPX Analysis:
Key Levels: 4248 & 4400
Bulls continue to hold control as long as SPX is over 4248 and have the edge meaning that dips likely get bought. Bears will need to reclaim 4248 in order to regain control.
Bullish Trajectory: Pullback likely. However if 4400 holds, can see continuation to 4434 to test the upper limits of the megaphone. If over 4434 then can see continuation into 4461 and 4534. Bulls remain in control for now even if there is a larger pullback next week all the way to 4248.
Bear Trajectory: There is no bear case above 4248. However because we are at meaningful resistance, if the 4400 level is reclaimed then we can retest this break out as shown in the red rectangle below at 4340. If we can get traction below 4340 then this turns into a failed breakout and we can sell to 4311 to take care of the first gap and then to retest the original failed breakdown at 4248-4260 area. If bears get us below 4248, then we start a crash leg to below 4000.
Summary: Below 4400 retest breakout at 4340. If holds, we continue up to 4434, 4461, 4534. If 4340 falls then we retest the original failed breakdown at 4248-4260. If that holds, we have a higher low and we continue on uptrend. If that falls, we retest the lows.
For those of you not in the Discord (www.jr28trading.com) I highly encourage it as we cover a lot of the setups given here but we also alert LIVE trade ENTRIES and EXITS.
Some calls from last week:
TSLA - short 220 to 210 target met, alerted $210P NOV 10 from 0.50 to 4.3+ 800%
SPX 4370P 0dte from 1.95 to 19.90+
SPY 436P NOV 13 alerted at 1.17, went over 3.3+
Aside from calling out some trade ideas, I post levels and setups in the discord to help you be able to watch levels and know when to enter and where to exit, without needing an alert to copy:
Very interesting shift on AAII sentiment. Last week we saw the highest levels of bearishness in recent months at the literal lows of SPX when we were at 4100. Now at 4400 in just 1 week, the bearish levels have gone to the lowest levels in recent months and bullish sentiment has increased substantially. This is a big red flag to see this shift to bullish at the recent highs and can definitely indicate a larger pullback is coming. Fear & Greed essentially has done nothing but reset to near neutral levels.
Here is the economic calendar for next week:
For this upcoming week I will be watching the following setups and levels:
SPY 0.00%↑
437 will continue to be key. If we are below that there is a high risk of multi-day selling towards 431.95, 429.66, 428.54 and 427.09. As long as that holds it would just be a healthy pullback and dips might be supported for a move back to 450+
For a bear case, there will need to be some closes under 423.67 area which will open the doors to a retest of the lows.
Summary: Below 437 can see dips to 428.54-431.95, overshoot 423.67 which should be buyable for a retest of 438-440. However, if we start to close below 423.67 the bulls will lose control and bears can get a sell off going to retest the recent lows near 409.
If SPY > 437, target 440, 442, 444 (high risk of sell there). If momentum strong enough then direct to 450 but I would not chase.
If SPY < 437 can short the rips to target 431.95 (possible failed breakout). Below that is 429.66, 428.54, 427.09, 424.49, 423.67.
AAPL 0.00%↑
184.26 key level
There was some flow AAPL $180P DEC 1 and AAPL $175P DEC 15 flow
Above 184.26 we may see a breakout into 190-192 (high risk of selling here).
Below 184.26 we can try short back to 178.77, 177.46, 175.97
NVDA 0.00%↑
476.09 key level.
Above that target 500-505
Below that target 458.16, 451.54, 444.08, 434.20. Dips may be bought there ahead of ER.
QQQ 0.00%↑
373.74 key level
Above that target 375.66, 380
Below that target 367.02, 364.54, 361.75
TSLA 0.00%↑
211.74 key level
Above that target 221.26, if that clears with conviction then 231.51
Below that target 204-205. If that does not hold then 194.
GOOGL 0.00%↑
130.71 key level
Above that target 133.19, 135.06
Below that target 128.23, 125.49
ROKU 0.00%↑
80.25 key level
Above this target 83.88, 87.10, 95.84
Below this target 76.73, 71.61
MSFT 0.00%↑
MSFT in price discovery mode. Weekly breakout here is undeniable as is the 380C, 390C, 400C flow. The only chance for bears here is a failed breakout which would require a drop below 349.67.
However, for the purpose of a overall pullback in the market, we can use 360 level as a backtest of this breakout is possible.
Below this target 353.85, 351.95, 349.67, 346.50, 344.49
Above this target 367.68 and above that is a big breakout to 380-390
AMZN 0.00%↑
139.97 key level
Below this target 137.44, 135.04, 133.71
Above this target 147.69, 151-153.34
GDX 0.00%↑
27.25 must hold for a retest of 28.43 area. Must get over 28.43 area to target 29.09. Breakout above that to 30.79
ENPH 0.00%↑
Watching for this here at the bottom of a falling wedge on weekly. If holds 76 it may be setting up for a move to 94.
TLT 0.00%↑
As long as 85.87 holds the trend continues to the upside. Needs over 89.74 to breakout to 92.76, 93.92 next.
DIS 0.00%↑
88.20 must hold to keep move to 94-98 in play.
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Have a wonderful weekend!
Wishing you a successful and profitable trading week ahead!
Best regards, Jovan