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The week ahead 15 July 2019

Hi folks


Ok a quick summary of last week. I had the resistance levels of the ES at 09/19 and the dow at 27250 i had expected a down day Monday and Tuesday morning then a rise into Powells testimony, got the down day Monday but Tuesday i expected a re test of the overnight lows in RTH- that didn't happen the NQ was just bought and the rest is history.. The levels held well and we ended the week at essentially 3019. Total profit for the week was 259 ticks all tweeted in RT and that's put me at 1438 for a 5 week period.


It should be now abundantly clear that the market is essentially all about the FED reducing rates at the end of month. So for now any drops should be bought i.e. BFTD - however there is one caveat ... earnings season is now upon us. Tomorrow we start with financials JPM and CITI before the bell and we also have Chinese GDP data (Exp 6.2%) ( which of course will be fake) - I can't see financials having a great time with the market participation being extraordinarily low and interest rates being so competitive - i think it will about Q3 guidance that will determine how the market reacts. While i am at it i can't see the likes of Boeing & Caterpillar having a good time in the past quarter either nor going forward.


This means trying to predict where we go from here is anyone's guess the bears will need a catalyst or series of catalysts to change the overall narrative of the market. The narrative will have to be hey the actual data is now real and we have a very real potential of going into a recession and thus market acts accordingly.

The difficulty here is if we have a market that is only concerned about money supply and cheap credit where bad news is still good and thus the market can still go up!


I was reading some analysis yesterday saying by the end of 2020 Dow could be at 34k and SPX 3700 .... to me that sounds ridiculous but stranger things have happened!


So this week i have levels at 3019 / 3036/ 44 /50/75 on the upside weekly pivot is 2998

if we break that we have a series of supports at 93/88/82/75/62/56 and gaps to fill. Dow resistance 27530/27699 support 27110 WP /27k/26950/26875 NDX 8050/35/8000- 7875WP /7812 if we break weekly pivots and they convert to resistance then we could see a nice sell off. RTY am looking for resistance at 1594 /1600 support 1568/58/46. I am expecting in the next few weeks a nice 2% -3% move to the downside on the markets which could mean 60-90 ticks on the SPX and 600+ on the dow ! so will wait patiently for that set up. As always let price dictate.


I have mentioned that i will do a webinar and i will do it in the next couple of weeks ( i am waiting for the kids and wife to go holiday so i have some nice quiet time to do it) So will probably be 1st weekend of August.


I want to give you all something to think about....


The ongoing Fintwit saga between Ordeflow / Volume profile and Charting. In my eyes they are all one of the same ie technical analysis, the interesting thing here is with ATH's abound one can clearly see the limitations of order flow and volume profile - why - because there is no order flow or volume above an ATH price it has never traded that price so no data! Thus to find resistance one has to use TA /Charting tools / Trend lines/ Fibonacci to predict levels of resistance ... Order flow only has its uses in a range of known data points. Therefore you can clearly see that one should use all forms of TA to paint a picture.


There are only 3 things you need to understand to trade.


1. Probability

2. Risk (this includes, Position management)

3. Data (this includes Price, TA (Charts/Trendlines/Order flow/Volume/time/fundamentals/value/macro/psychology)


To make my point Warren Buffet bought very large into Apple in May 2016 at 85 (this was well published) and if you look at the chart above do you think he bought because a) he was sat in his chair looking into a Orderflow DOM or did he b) See that it had retraced 50% from the last move higher from July 2013 and that monthly SD2 bollinger band was support? and thus created value?


Any way something for you all to think about, I encourage you to think about the above 3 points and include them in your trading, particularly risk & time as for day traders these can easily destroy us - unfortunately we all don't have deep pockets like Mr Buffet! As always feel free to ask questions and i hope you have a good week ahead. TI


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