Good Day and I hope you are well.
comment: Last week I wrongly wrote that earnings season will start in June, sorry about that. It’s mid July. So what to do at 24300? Market finds acceptance above 24000 but we have made 500 points to the upside in the past 3 weeks. At some point bulls will let it go and reality will set in. Market is holding above the daily 20ema and until that changes, bears are not favored for anything. Be that as it may, I would rather look for some short scalps closer to 24400/24500 than longing above 24200. For next week I expect 24500 to get hit again, as well as 24000. Anything below 23800 would be a huge surprise though.
current market cycle: bull wedge and on the weekly tf it’s a broad bull channel and we are at the very top
key levels for next week: 23000 - 25000
bull case: Nothing changed so my comment remains the same.
25000 is the next big round number but I highly doubt we get there. I was wrong last week and until we leave bear gaps behind us, bulls are favored for everything because the reality is that buying every dip has been profitable for months now. Bulls have to keep printing higher lows though.
Invalidation is below 23700
bear case: We are basically where we were one week ago, so my comment from last week also applies to the bears.
I doubt we have much more upside in store but we could very well spike to 25000 before we can expect more bulls to stop buying every dip. Bears get spikes and zero follow-through, which leads to many bear traps. Scalping both sides was fine the past 2 weeks but bears have to take quick profits or they vanish quickly. Bears need a daily close below 23700 for more downside and until then, swing shorts are account destroyers. We need a big gap down which does not close to stop the BTFD crowd. So if we get a decent one next week and market only corrects sideways, that will be the trigger for more selling.
One thing that changed is that the current wedge has not a lot more room to go and I think if bulls fail to print 25000 next week (will align with all markets ripping higher), they likely won’t get it,
Invalidation is above 24550
short term: Neutral. Still scalping both sides. Best bears can get is a trading range 23500 - 24500 and anything outside of this range is a surprise. 24550 and higher would be less of a surprise though.
medium-long term from 2025-05-25: My rough guess from early May was down over the summer and up into year end. POTUS certainly helped with the 50% tariffs. Markets were not positioned for any risk what so ever. Now we got the atomic trade bomb. This view has not changed, just the time horizon which aligns better with Q2 earnings and my expectation that we will see the tariff madness coming through. Markets can ignore risks for longer than you can maintain your account but that does not change the reality and if you think this tariff war has a happy ending, you have not paid attention to anyone but the US government or their echo chamber.
comment: Last week I wrongly wrote that earnings season will start in June, sorry about that. It’s mid July. So what to do at 24300? Market finds acceptance above 24000 but we have made 500 points to the upside in the past 3 weeks. At some point bulls will let it go and reality will set in. Market is holding above the daily 20ema and until that changes, bears are not favored for anything. Be that as it may, I would rather look for some short scalps closer to 24400/24500 than longing above 24200. For next week I expect 24500 to get hit again, as well as 24000. Anything below 23800 would be a huge surprise though.
current market cycle: bull wedge and on the weekly tf it’s a broad bull channel and we are at the very top
key levels for next week: 23000 - 25000
bull case: Nothing changed so my comment remains the same.
25000 is the next big round number but I highly doubt we get there. I was wrong last week and until we leave bear gaps behind us, bulls are favored for everything because the reality is that buying every dip has been profitable for months now. Bulls have to keep printing higher lows though.
Invalidation is below 23700
bear case: We are basically where we were one week ago, so my comment from last week also applies to the bears.
I doubt we have much more upside in store but we could very well spike to 25000 before we can expect more bulls to stop buying every dip. Bears get spikes and zero follow-through, which leads to many bear traps. Scalping both sides was fine the past 2 weeks but bears have to take quick profits or they vanish quickly. Bears need a daily close below 23700 for more downside and until then, swing shorts are account destroyers. We need a big gap down which does not close to stop the BTFD crowd. So if we get a decent one next week and market only corrects sideways, that will be the trigger for more selling.
One thing that changed is that the current wedge has not a lot more room to go and I think if bulls fail to print 25000 next week (will align with all markets ripping higher), they likely won’t get it,
Invalidation is above 24550
short term: Neutral. Still scalping both sides. Best bears can get is a trading range 23500 - 24500 and anything outside of this range is a surprise. 24550 and higher would be less of a surprise though.
medium-long term from 2025-05-25: My rough guess from early May was down over the summer and up into year end. POTUS certainly helped with the 50% tariffs. Markets were not positioned for any risk what so ever. Now we got the atomic trade bomb. This view has not changed, just the time horizon which aligns better with Q2 earnings and my expectation that we will see the tariff madness coming through. Markets can ignore risks for longer than you can maintain your account but that does not change the reality and if you think this tariff war has a happy ending, you have not paid attention to anyone but the US government or their echo chamber.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.