✍️ Weekly Trade Plan & Recap 29th Jan - 2nd Feb
S&P Pullback or Reversal Time? - Here's what you need to know. Plus analysis for the Dollar Index, EUR/USD, Gold, Silver, Copper, WTI Oil and Bitcoin.
This week could be a rollercoaster ride with the FOMC Press Conference/US Fed Funds rate on Wednesday and Non-Farm Employment Change on Friday.
It’s expected the FOMC will leave the Fed funds rate and the pace of Quantitative Tightening (QT) unchanged.
As we know, when J. Powell takes the podium, the markets will often move in the wrong direction first, before sharply reversing at a key level. My FOMC strategy takes advantage of that fact and you can find it here.
With that in mind, I’d like to see a deep pullback on the S&P 500 to scout for further longs at the green arrowed levels on the 4 hour chart at 4800 and 4755.
After correctly predicting the Santa Rally, the S&P exceeded the 4820 target and subsequently spent all of last week grinding along a trendline, or “Wall of worry”.
What I would like to see next is a breakdown of that trendline, perhaps during FOMC.
Bear in mind, the further price moves down, the more likely that what we are seeing is not a pullback and could be a reversal.
Notice the purple circled area on the chart above - that important level is where we took a daytrade a fortnight ago at 4722:
Now… if the market visits that level again and drops even lower, we will have a change of structure with a lower low on the higher timeframes - and that could be the start of a much more bearish move.
Here’s what I mean on the daily chart:
So in summary, we remain bullish the S&P on pullbacks at good levels, until the higher timeframe market structure turns.
Next for members, we’ll look at what to expect for the Dollar Index, EURUSD, Gold, Silver, Copper, WTI Oil and Bitcoin this week. 👇🏼👇🏼👇🏼