ES Journal - 2023/2024
- Thread starter Buy1Sell2
- Start date
If markets always acted rationally, there'd be a lot more rich people in trading.
One could argue that if you trade technically, the markets are always rational.
I gave up making sense of the markets a long time ago. Of course, there's no harm in having a fundamental view, too. Maybe it could avoid getting too reckless / over-confident in either direction.
Fundamentally, I'm more of a bear, but I don't let that view interfere with my short term trading.
100% agree that knowing some fundamentals can't hurt, strong opinions weakly held is part of survival, and overconfidence is a mass murderer. as far as rationality, what does that even mean anyway when the markets are made by humans and humans are irrational? if anything it just means that whatever the crowd believes to be true must be rational, and the crowd is frequently wrong.
AI mania.
ES Long from mid march closed. NQ Short from yesterday is still open, will give it some more wiggle room, but certainly no more than a 200-pt loss.
Interpreting the current S&P is challenging. I'm inclined to believe that its recent surge may be misleading. While certain stocks like Apple are showing weakness and Nvidia seems to be reaching its peak (blowoff top?), others like Google and Amazon continue to trend. This highlights the issue with indices – each constituent stock follows its own trajectory, which should be a primary focus for the ones investing in stocks, making the indices somewhat of a distraction. It's a complex situation, my outlook suggests that the S&P might be aiming for a 4000 target, which aligns more coherently with the overall market narrative than an immediate jump above 4300.
Ultimately, one must avoid the pitfall of going against the bull market. If you've been on the sidelines for the past seven months, waiting to invest, realize that the market won't make it easy for you to join in. Moreover, when it comes to AI tech stocks, the S&P is inconsequential - a red herring! The current uptrend is mostly about AI, if you haven't quite realized this yet, then do some further investigative research.
Interpreting the current S&P is challenging. I'm inclined to believe that its recent surge may be misleading. While certain stocks like Apple are showing weakness and Nvidia seems to be reaching its peak (blowoff top?), others like Google and Amazon continue to trend. This highlights the issue with indices – each constituent stock follows its own trajectory, which should be a primary focus for the ones investing in stocks, making the indices somewhat of a distraction. It's a complex situation, my outlook suggests that the S&P might be aiming for a 4000 target, which aligns more coherently with the overall market narrative than an immediate jump above 4300.
Ultimately, one must avoid the pitfall of going against the bull market. If you've been on the sidelines for the past seven months, waiting to invest, realize that the market won't make it easy for you to join in. Moreover, when it comes to AI tech stocks, the S&P is inconsequential - a red herring! The current uptrend is mostly about AI, if you haven't quite realized this yet, then do some further investigative research.
I don't really concern myself with the crowd, but I do pay attention when I notice chatter gets excessively bullish or bearish and will tend to think the market is prone to go in the other direction soon. For example, after this recent run higher there's likely a lot of late buyers coming into the markets and people are once again starting to think, "How high?", and rush in. Usually, this could mean we're closing in on a short term top. At least in this post QE market.
Now, back to technical trading.
Fundamentally, the markets will move because of an imbalance between supply and demand. This could happen for a myriad of reasons and quite possibly those reasons will never even be known - except maybe after the fact.
Maybe some dumb clown with too much money in his pockets decided to buy a ton of stocks on a given day or maybe some other clown decided 4200 yesterday was a great place to hedge or take profits on his stock portfolio. Maybe Powell and his goons are buying stocks. Maybe shorts are forced to cover.
I rarely bother to even read numbers from actual news reports as my opinion have zero value/influence on prices.
The technical trader will/should only concern himself with how the market moves technically and trade accordingly.
Simply put: Is it going higher or is it going lower? If higher, go long, if lower, go short.
So, breaking out higher this week on poor breadth and what seems like a world that's on fire may not make sense from a fundamental viewpoint, but technically it's all perfectly rational and logical as prices are moving based on supply and demand as they've always done. If a trader knew nothing about what's going on in the world at the moment he should have zero issues going long, but if he lets his fundamental view interfere it may be very hard to actually trade the long side as it may make zero sense.
At the least that's my take on it.
Technical trading today, Friday.
As always, price needs to confirm, but I feel very confident that today will trade above Thursday's High in RTH. That's > 4215.50.
The uncertainty is if that pop will get sold for a move back in yesterday's range or if we'll get continuation higher for another trend/semi-trend day higher.
I see an open gap above at 4230, so maybe that for an initial target. The next target above is at 4288.50.
1 % up = 4253.25
1.5 % up = 4274.25
2 % up = 4295.25
We haven't had a 2 % day up since the 6th of January this year, so who knows. Just keeping it there as a possibillity. I'm sure most didn't expect us to be here this week by Thursday's Close either.
Powell at 11:00 and options expiration could be worth considering of course, but from a strict technical view this is a long bias for me for at least a pop higher as long as a pullback holds on the Open.
Maybe a decent drop below 4200 would negate the long side for today, so can't get too confident on the long side either.
As always, price needs to confirm, but I feel very confident that today will trade above Thursday's High in RTH. That's > 4215.50.
The uncertainty is if that pop will get sold for a move back in yesterday's range or if we'll get continuation higher for another trend/semi-trend day higher.
I see an open gap above at 4230, so maybe that for an initial target. The next target above is at 4288.50.
1 % up = 4253.25
1.5 % up = 4274.25
2 % up = 4295.25
We haven't had a 2 % day up since the 6th of January this year, so who knows. Just keeping it there as a possibillity. I'm sure most didn't expect us to be here this week by Thursday's Close either.
Powell at 11:00 and options expiration could be worth considering of course, but from a strict technical view this is a long bias for me for at least a pop higher as long as a pullback holds on the Open.
Maybe a decent drop below 4200 would negate the long side for today, so can't get too confident on the long side either.
The market is moving up due to the post-SVB liquidity flood. The Fed is letting you buy dollars for seventy or eighty cents (swap depreciated bonds for cash).
Yes, theoretically it sunsets in spring '24. We'll see about that.
Nonetheless a hot CPI print or two could send us back to the 2022 lows in a flash, if it puts additional rate hikes on the table.
Definitely a bizarre configuration here with rates pricing in a huge recession, as equity markets are gliding back toward highs (or at all-time highs for some foreign markets).
Yes, theoretically it sunsets in spring '24. We'll see about that.
Nonetheless a hot CPI print or two could send us back to the 2022 lows in a flash, if it puts additional rate hikes on the table.
Definitely a bizarre configuration here with rates pricing in a huge recession, as equity markets are gliding back toward highs (or at all-time highs for some foreign markets).