7/31/2022 Sunday

$SPX (monthly, log scale) Monthly candle closed green and inside prior months range so we could say that its neutral candle formation. However, we closed right into monthly 5/9/20ema/20sma converged resistance as well as the key purple trendline extending from the year 1985.

$SPY (weekly, log scale) huge +13.8% counter trend rally from the lows. These types of aggressive rallies are common in a bear market. We will see if the downtrending weekly 20sma/ema will be respected as resistance along with the monthly 5/20ema. If we hold below the purple trendline and pullback without pushing above prior swing highs in May, then the current bearish hidden divergence remains in play which is another added bearish element.

Hidden Bearish divergence

$SPX (daily, Arithmetic scale) we closed into daily supply zone and right at potential channel resistance. This supply zone is the origin of a strong selloff in early June so there is potential for sellers to show up here. I made short entry expecting a pullback here in the daily time frame along with the higher timeframe(weekly,monthly) elements I mentioned above.

$SPX (daily) so far similar progression as the initial selloff from ATHs. Either it prints a lower high and pull back immediately here or we could see a push into news highs and then fail back below prior highs as we did back in March.

$VIX (daily) At falling wedge and uptrend line support, If support holds and we rally with a breakout of the falling wedge, then we should see a significant pullback in the market.

$QQQ (monthly, log scale) closed the month with a bullish engulfing candle but still has 5/9/20ema which is resistance until proven otherwise.

$QQQ (weekly) big spot here. Either we see continuation after initial push into higher highs with 5/9/20ema converged or we see a bearish reversal next week as we double top and reject at weekly 20ema/sma and channel resistance.

$QQQ (daily) double top and at potential channel resistance and at the level of weekly 20sma.

$IWM (weekly, arithmetic scale) at supply zone plus 20ema/sma and channel resistance.

$IWM (daily, arithmetic) at daily supply, channel resistance and at weekly 20sma.

$DJI (daily) at daily supply, weekly 20sma and channel resistance.

One common theme amongst all the leaders will be that the extended short term moves into major resistances which gives us a high probability of reversal in the overall market. We will get confirmation either Monday or early next week whether sellers will use this to their advantage.

$AAPL (daily, arithmetic scale) +8.5% move in 3 days with a huge gap up following earnings with spinning top (potential reversal candle). This extended move alone puts it at risk of pullback but its also at .618fib, channel, and uptrend line backtest resistance.

$MSFT (weekly) backtesting major H&S neckline and at downtrend line/channel resistance.

$MSFT (daily) nearly +13% move in 3 days and into channel resistance and weekly H&S neckline backtest.

$GOOGL (daily, log scale) +12% move in 3 days into channel resistance.

$AMZN (weekly, arithmetic scale) closed right into the backtest of the monster H&S neckline and horizontal support. Also at potentialy channel resistance.

$AMZN (daily) +20% rally in 3 days with a huge gap up following ER with doji candle right at multiple resistances. Currently backtesting the weekly H&S neckline as well as the horizontal level along with potential channel resistance. Even without the resistances, a pullback would be healthy and necessary after the extended move far away from 5/9/20ema.

$TSLA (weeky, log scale) at uptrend line backtest and channel resistance. If we reject and set a lower high, it will form the right shoulder of the head and shoulder.

$BRK.A (daily) at channel/downtrend line plus head & shoulder backtest resistance.

$UNH (daily, log scale) inside bar at supply zone with ascending wedge resistance.

$NVDA (daily) at downtrend line resistance

$V (monthly, log scale) closed right into backtest uptrend line (red) with monthly 5/9/20ema resistance.

$V (weekly) decision time. Its either going to reject here at downtrend line resistance along with monthly 5/9/20ema and red trendline backtest or power through bullishly. The weekly hanging man is a potential bearish reversal candle.

$CL_F crude oil future (monthly, log scale) Dark cloud cover reversal in June following 6 straight green months and at the peak of the rally from the 2020 lows and now bearish confirmation with lowest close 4 months. Also coming off rejection at major monthly supply (from the 2008 crash) and that bearish element is still in play. Oil has participated in major market corrections in the past as seen in recent examples in 2020 and 2008 so there’s potential this could signal the next strong leg down in the market. Watch for 5/9ema bearish crossover and potential breakdown below ascending channel. MACD converging and ready to bearcross on further weakness. In 2008, we had the monthly bearish engulfing reversal at the top, followed by a red candle close above 9ema before continued weakness and eventual crash.

$CL_F (weekly) failed on the inside up move above prior weeks highs, rejecting a weekly 5ema and holding at the double top neckline support backtest (now resistance). Once again tested and held the channel support for third week in a row but it should get weaker the more times its tested and could break the next time down.

$XLE Energy sector (monthly, log scale) In june we had the bearish engulfing reversal at the top of the rally that started at the 2020 pandemic lows along with a false breakout reversal back below horizontal support. July monthly candle rallied at the uptrend line but remains below the horizontal resistance and did not push past the midpoint of the bearish engulfing candle so that candle remains the dominant force.

$XLE (weekly) massive +20% rally from the lows in just 3 weeks. Will it be able to sustain this pace and make a full reversal back above the horizontal resistance or will it run out of gas and close right back below the weekly 5/9/20ema which it closed over this week?

$IBB Biotech(Monthly, log scale) Rejecting so far at the downtrend line and monthly supply. See if we a bearish response this month off these 2 bearish elements.

$IBB (weekly) holding below monthly supply consolidating sideways for the past 3 months and now inside bar with 5/9/20ema converged -looks ready for a strong move in either direction. Since we are in the downtrend and working against the monthly supply, watch for the inside down move below last weeks lows and then bearish reversal back below the double bottom resistance for a false breakout reversal.

$HGX Housing sector (monthly, arithmetic scale) Rallied right back into purple trendline resistance which has been a key inflection point in the past. Monthly 9/20ema riding down from above should act as resistance as well. If $SPX were to sell off and start on its next leg, expect $HGX to reject here at the purple trendline.

$HGX (weekly) currently double topped at prior swing high but slightly below with RSI making new highs – that’s a bearish hidden divergence as long as price doesnt make new highs next week.

$IYR real estate ETF (Monthly, arithmetic scale) Bullish engulfing candle – does it mean the bottom is in? We are coming off a bearish 1 year consolidation box breakdown just last month and remain below it. We closed into monthly 5/9/20ema converged resistance so this could get pushed right back down.

$IYR (weekly) Similar to $HGX: currently double topped at prior swing high but slightly below with RSI making new highs – that’s a bearish hidden divergence as long as price doesnt make new highs next week. If we push higher, we have the monthly box support backtest which should be strong resistance.

$IYT (monthly, Log scale) consolidating above backtest support at 205 with inside month. 5/9/20ema converged resistance above.

$IYT (weekly) closed right into weekly supply and 20ema/sma resistance. Hidden bearish divergence

$SMH semiconductor (monthly, log scale) bullish monthly candle but stopped right below 5/20ema resistance with 9ema and 20sma above it.

$SMH (weekly) close above the backtest resistance of prior support breakdown but there are times where backtests are not textbook and overshoot to take out stops of traders’ that are shorting off the backtest with stops above the backtest level. Also the monthly moving averages and weekly 20ema/sma should be considered resistance until we get a strong move above it. If we get early weakness next week, there is a bearish hidden divergence here as well.

$XLF financial (monthly, log scale) rallied off the backtest but remain below monthly 5/9/20ema

$XLF (weekly) bullish breakout above downtrend line and box range. However, we are at potential channel resistance with downtrending 20ema/sma above that should act as resistance. We can also see a failed breakout reversal if the overall market pulls back. The hidden rsi divergence should help the downside move.

$XLP (weekly, arithmetic scale) bullish breakout above recent range but into weekly 20sma resistance and potential channel resistance

$XLV health care(Monthly) consolidating sideways for over a year with 5/9/20ema converged and holding above key support at 125. Pushed above prior months highs but closed back below.

$XLV (daily) breakout above horizontal resistance and holding below channel resistance. Bearish case would be a close back below 130.70 for a false breakout reversal as we did back in June.

$XLY consumer discretionary (daily, arithmetic scale) backtesting horizontal support (now resistance) and at channel resistance.

$KWEB (weekly) following the false breakout reversal back below box resistance, we now have bearflag wedge breakdown with 5/9/20ema converged

$HYG (weekly) closed above downtrend line resistance but into weekly 20ema resistance following 4 consecutive green weekly candles in a row. Could see a pullback and failed breakout reversal. RSI bearish hidden divergence.

$BTC (monthly, log scale) consolidating at prior ATHs and weekly demand. Closed with small base candle, inside bar. There is potential for drop-base-drop if August were to sell off. Bulls will want to continue rally with inside up move above prior months highs.

$BTC (daily) currently holding below weekly 9ema and appears to be in a bearflag channel.

Most of the setups are demand/long setups. Remember you can have a higher time frame bearish outlook in the market and still daytrade these levels when they trigger for intraday gains. Remember you don’t have take every setup but knowing that you have plenty of solid setups to fall back on will make you more disciplined and avoid chop/weak/boredom trades. (Do not waste time looking for a trade or watching intraday 5/15min candles hoping for something to happen. Find a setup, set alerts, and forget about it until it triggers) Make sure to review prior triggered setups and see how they react. Also, if $SPY and the rest of the market is selling off aggressively and you are uncertain/confused – BEST to pass on long plays (or short plays if market is on an aggressive rally) or narrow focus onto just trading $SPY or sitting on hands . 1st Goal is to not lose money.

$ADBE (daily) short setup at 424.17

$AMAT (daily) short setup at 113.20

$AMD (daily) long setup at 85.91

$ARKK (daily) short setup at 49.74

$BA (daily) short setup at 174.51

$BAC (4H) short setup at 35.66 and long setup at 30.09

$BIDU (daily) long setup at 120.15

$BMY (daily) long setup at 71.21

$BRK.A (daily) short setup at 467649 (if we push above current resistances)

$COST (4h) short setup at 559.76 and long setup at 514.09

$CROX (daily) long setup at 59

$CSCO (daily) short setup at 49.68 and long setup at 38.98

$DIS (daily) short setup at 106.79

$DKS (daily) short setup at 99.90

$GE (daily) short setup at 76.69

$GME (daily) long setup at 23.51

$GRPN (daily) long setup at 9.28

$IBM (daily) long setup at 117.37

$LCID (daily) short setup at 24.64 and long setup at 10.05 ****ER 8/3 AMC

$MCD (daily) short setup 268.12

$MGM (daily) short setup at 34.85

$MTCH (daily) long setup 66.82 and short setup at 84.25, 110.14 ****ER 8/2 AMC

$MU (daily) short setup at 68.65

$NFLX (daily) long setup at 192.50

$NIO (daily) short setup at 25.40

$NKE (4h) long setup at 106.30 and (daily) short setup at 120.90

$NVDA (4h) short setup at 184.79 and 166.75

$OSTK (daily) long setup at 22.46

$PDD (daily) long setup at 39

$PFE (daily) long setup at 47.38

$PINS (daily) long setup at 17.53

$SBUX (4H) short setup at 87.39 and long setup at 80.67

$SNOW (daily) short setup at 178.75

$SQ (daily) short setup at 84.60

$TLRY (daily) Long setup at 2.80 (Massive demand zone where it had rallied +90% previously near all time lows.)

$UBER (daily) short setup at 25.70 and 27.41 ***ER 8/2 BMO

All the images are in high resolution. If they appear small, try right clicking on the image and open in new tab or window to expand fully.

4 thoughts on “7/31/2022 Sunday”

  1. I wonder if you are tracking KOSPI, Shanghai Index, and Major Europe indices?
    I know you did few newsletters ago and hope to hear your recent thoughts on these internationals..

  2. Hi question, I’m a newbie. If there was a setup and just wanted to clarify something. if an active setup was there last week and is not this week (example MS) does it mean you no longer like the setup? thanks for the clarification.

    1. Closed right into supply an didnt react on intraday chart so it was a pass for me. But setup can still work if we dont go over the zone. Just preference to play the cleaner reacting ones.
      And if used/triggered, setups are removed from actove list

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