S / R Levels - Oct 14 - 18
Once again, these golden levels worked well to validate setups. After a fake bearish move on Monday, the central weekly level was recovered on Tuesday, triggering bullish signals.
Last Friday's daily setup anticipated a pullback, which materialized on Monday, however, by Tuesday the central S/R level was recovered, tech consolidated that level with conviction, the rest of the week is bullish history.
That is the importance of the S/R levels, and also the importance of the weekly charts, they provide a broader view of the market, and they presented mixed signals last week.
Analyzing the weekly timeframe requires special aspects like annual support and resistance levels, and the ability to apply correctly the best technical indicator.
The breakout in NVDA was expected based on the weekly chart, and TSLA’s selloff could have been avoided if the central S/R level $250 was considered to stay far from that stock.
The support and resistance levels are the best protection for any invalidation.
There are many bearish signals in the market: There are divergences in oscillators, and the macroeconomic indicators are raising a big red flag as published last Wednesday in one of the most comprehensive studies that I’ve published, and one of the most liked ones here in Substack by paid subscribers. Get access here:
The context may be challenging, but as long as price continues above the key levels, there is no reason to go against the trend.
The economic Indicators study highlights the time between bearish macro indicators triggered and the peak in the market before previous bearish events. Let me tell you even as a free subscriber: The FED Pivot is not the reference.
Last week I provided a visual case based on the last 18 weeks about how to use the S/R levels. Today, I share the daily earnings in my brokerage account before I made some adjustments while the market was closing. 95% of my trades are at the daily close, and Friday is an important day of course.
S/R Levels are key, I could be bearish fighting against price action, but I’m nimble, which is nothing easy, that demands a lot of psychology.
I’d say: Bearish below, bullish above, no thinking!
VIX - A Key Indicator that anticipated a bullish reversal
The Volatility index closed overbought relative to the Bollinger band on Monday, that was a big warning about a reversal:
I expected a mild decline on Tuesday before continuation, but that day the central S/R levels were recovered for SPX and NDX, on Wednesday the DJI join to the party, and IWM made it above the level until Friday. That index has a separate analysis in the weekly compass. The signal in SPX and NDX was strong enough to be nimble and disregard a bearish setup.
Here are the S/R levels for SPX, NDX, DJI, SY, QQQ, IWM, TLT, ES Futures, NQ Futures, NVDA, META, MSFT, AMZN, GOOG, AAPL, TSLA, GDX, SILVER, BTC and ETH.
I insist in the importance of these levels, because I use them.
Weekly S/R LEVELS: