SPX Trade Plan in September and October
Updated
In my previous post, I predicted that a major bottom would occur soon within the 4200-4300 range. August's low came in at 4335, and we experienced a decent rally in the latter half of August. Now, I know everyone's burning question is this: Has the low been reached? Are we heading for a lower low in the next couple of weeks, or are we headed for a new high? In my opinion, we still have another pullback, similar to what we saw in August, before we make our way to a new high. So, be on the lookout for the pullback I believe will occur sometime between September and early October (the window of weakness), which will provide a long-term buying opportunity.
As for the short term, I anticipate that the first two weeks of September might be choppy but without any significant sell-off. I will take a level-to-level approach for the short term and will exercise caution when the price reaches the range of 4550-4640 for any potential swing long positions. For my short-term plays, I will provide updates in this post.
As for the short term, I anticipate that the first two weeks of September might be choppy but without any significant sell-off. I will take a level-to-level approach for the short term and will exercise caution when the price reaches the range of 4550-4640 for any potential swing long positions. For my short-term plays, I will provide updates in this post.
Note
August has been a great month for me as I've successfully nailed most of short-term swing high and low in SPX (please check my previous post). Today, the price experienced a significant sell-off, reaching the pivot level I mentioned earlier. I decided to enter a long scalp trade here, targeting a range of 4500-4550 with a tight stop-loss below 4430. If tomorrow we break today's low of 4440, I will be looking an entry point around the 4400 level for another long position.Note
SPX is currently consolidating around the pivot area of 4450. I am still holding my position as my stop loss hasn't been triggered yet, with a target of 4500. I have a cycle high date coming up on 9/18, which also coincides with the Triple Witching date. I plan to switch to a sell position if we reach the high around that time.Note
Nice move up today. As usual, I am trimming 1/3 of my long positions and leaving runners with stop loss at breakevenNote
Since the Consumer Price Index (CPI) report is tomorrow, I've decided to reduce my long position at 4480-90, leaving only 1/3 of my position running with a stop loss at breakeven. My price levels for this week are 4400/20 for going long and 4500/4520 for going short on the SPX. Please remember the date 9/18 as a potential cycle high date so be cautious with any long positions when we are close to that date.Note
The market is currently consolidating in a tight range. I believe a significant move is imminent, and my inclination is towards the downside. I have closed all my scalp long positions and will be entering swing short positions. My first swing short position was initiated at 4475 today. I will add more if the price rises to around 4500. My stop-loss will be placed above 4520, with targets set at 4400, 4350, and 4300Note
My plan worked perfectly once again. 445-> 450-> 445. I will now be updating my short-term trades more frequently on my X page (old Twitter), and I may also share advanced options strategies for both indices and individual stocks. It is more convenient than posting here for short-term trades. Please check the link on my profile and follow me for further updates. I hope my analysis proves helpful to others. Have a good weekend!Note
My first target was hit today at 4400. I'm sharing my thoughts on the short and long term on my X page. I hope that helps!Note
I also shared an options trade on Monday that has gained 300% today: x.com/zzzdoge911/status/1703830879624466894?s=46Note
The second target got hit today at 4350 SPX. Congratulations to those who followed this trade. Now, on my chart, we are entering a long-term buying zone. However, don't rush to go long just yet, but you can slowly scale into your favorite stocks. Also, don't be too greedy with shorts here. I will update my next trades on X and share my favorite stocks and entry points. Stay tuned!Note
I haven't been actively trading in the short term lately. My plan remains unchanged, and I still believe that the 4200-4300 range is a suitable zone for long-term positions. My analysis is based on several factors, not just technical indicators. So far, everything is going according to plan.In the short term, I anticipate that the market will bounce back early next week, likely in the range of 4280-4300. I've started to reload my long positions today and plan to add more next week at the mentioned levels. My target for this leg of the trade will be 4380-4440 by end of next week for swing positions.
Note
The first weekly target (4380) was reached today, sooner than I expected. I'm scaling out some positions. Next, I plan to scale out at 4400-4420. If there's a pullback to the 4335-4350 level this week, I will consider buying againNote
What a crazy week! I did not expect the sell-off in the last three days. Apparently, it faced strong rejection at the weekly resistance level. The support at 4335 held at first but was heavily sold off once it was breached (I hope anyone who had stop-loss orders in place managed to exit).I would like to share my thesis after checking a few things. Of course, nothing is 100% certain, but I will follow the higher probability.
My medium-term view remains bullish (anticipating an end-of-year rally):
1. There is a very strong seasonal pattern that supports the bullish view, especially in pre-election years.
2. The impact of the bond market and interest rates: I believe the bond market should bottom soon, which means yields should pause at times and support a stock rally.
3. Some other indicators I use, such as Fed tools and valuations, don’t provide any warnings of a bear market yet. It doesn’t appear to me that stocks are overvalued.
4. Bearish sentiment: There has been a lot of bad news and uncertainty lately. Bad news typically emerges when the market is near its bottom, rather than at its peak.
5. Technically speaking, on a weekly basis, we are still in an accumulation zone. In terms of the trend, we are still holding the uptrend from October of last year. There are also some strong support levels if 4200 is breached, specifically in the 4170-4190 range, which is very significant for bullish sentiment. If it reaches that point, I’d like to see a swift reversal and a return above the daily SMA 200 in less than 2-3 days.
In both the short term and medium term, the upcoming week will be crucial in terms of technical levels and timing. I’ve marked 10/20 as a minor cycle-low date for a potential relief bounce early next week. This coincides with the post-Opex week when a lot of option gamma expires. Additionally, 10/25-10/27 is another major cycle low date. I’m looking for signs of bullish strength within that timeline, especially around the 4170-4190 levels if it goes lower (which seems likely based on today’s close). Furthermore, next week, the resistance/pivot level should be in the range of 4280-4300. If we reach that range by Tuesday, it could lead to short-term rejection
Note
The bearish movement this week has caused me to adjust my medium-term perspective slightly. As I mentioned last week, I was hoping to see a swift reversal between 4170-4190 to confirm that the drop below 4200 was a false breakdown. We did experience a 70-point rally from 4180 on Monday (which coincided with my cycle low date +1 and my level). However, this move was relatively weak and stalled at 4250, leading to a relentless sell-off down to 4100. The weekly close was weak, signaling a warning for a bullish medium-term outlook. I plan to update my medium-term view (6 months to 1 year) in a few weeks as I need more confirmation. While my perspective might change slightly, I believe we are very close in terms of time and price before a substantial year-end rally. The distinction lies in that it won't be a rally from 4200/4300 to 4800, but rather from 3950/4000 to 4400-4500.Regarding the short term, we have two months remaining in 2023, and my inclination is that we should soon witness a bounce for a year-end rally. Nevertheless, given three consecutive bearish months (August, September, and October), I anticipate a lower low in November before any significant rebound. My primary support zone at the moment is 3950-4000, with a timeframe around mid-November. Time is more critical than price to me, so I will patiently await for the structure developments.
Looking ahead to next week, I anticipate a bounce in the final two days of October, though I don’t expect a strong rally at this point. We might see only a 50-70 point move from the 4080-4100 range. The current resistance is at 4150-4180. Additionally, I expect a dip on Wednesday, November 1, followed by a more extended relief bounce lasting 5-7 days, possibly reaching a resistance level of 4250-4300 before making a lower low towards 3950-4000 in November.
For now, my focus will be on short-term market movements, as the market can exhibit rapid shifts in either direction.
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