The bearish thesis for the major indices posted on Saturday was confirmed today; the SPX opened below the central daily and weekly levels, setting a bearish momentum right from the start. The daily level (CDL) of 7,657 was lost from the opening and the price found support at 7,596.5, a support layer provided on Friday.
The day was red for semiconductors, but it was not as ugly for the stock market in general. Individual names that I mentioned on Saturday as valid bulls like META, GOOG, and AAPL, showed strength or resilience today. Among the setups highlighted with the highest probability to occur and reach their targets, NFLX and WMT started the week in the expected direction: WMT rallied as anticipated, reaching close to 109.9 🎯 as a weekly target modeled last Friday. That area acted as resistance, and the stock closed up +1.8% for the day. NFLX rallied 3.8% as a high-probability bullish setup, crossing the bullish target of 79.4🎯 and getting very close to 81.1, which was the next weekly bullish target modeled last Friday. Meanwhile, SPX/SPY, DIA, and IWM started the week bearish as anticipated on Saturday 🎯.
Building on last week’s daily notes, I covered how to manage high-probability setups, how to read the setups blueprint, and what to consider when a bullish target closes the day as resistance for longs versus closing as support. The same principle applies to short positions: when a target holds as support by the end of the day, contrasted with when a level is breached and closes the day as resistance after previously being support. We closed the week with seven key learnings included in the S/R levels edition, get access to these guides using real life charts:
Last week, we studied how to manage momentum when a bullish probability setup opens with a gap up, as well as how to manage bearish probability setups when the price opens with a gap down using AMD and DIA as case studies.
Today, we are looking at AMD again, specifically the opposite scenario: how to manage a bullish setup when it opens below the central weekly level (CWL). Again, please make sure to review last week’s guidance, the content goes straight to the point, and uses real life charts.
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Today’s Agenda
Managing Setups Below CWL: AMD Case Study
Daily Plan for SPX, ES=F
Combined Levels for Tomorrow: , SPX, ES=F, NVDA, AVGO, AMD and MU
Watchlist Tracker
Let’s begin.