2024-07-17 - priceactiontds - daily update - nasdaqGood Evening and I hope you are well.
comment : No deeper analysis needed today. Could have sold anywhere and made money. Tomorrow will be key for next week. Best case for the bears is a weekly close below 19700 but anything below 20000 would suffice.
current market cycle: climactic bull trend with overshoots is done. Market will probably range some before we begin a new bear trend over the next months.
key levels: 20000 - 21000 - if we break below 20000, next support is 19700
bull case: Bulls see this as a deep two legged pullback but since they are still trading around 20000 and inside the bull channel, their premise lives on. They want a strong reversal tomorrow and since bears were in pain for so long, any good bounce above 20100/20200 could make most bears exit their shorts. Bulls want a retest of the broken channel, which would also be a retest of the ath 20983. After a -3% day, anything in this section is low probability and the best bulls can hope for is to find support and go sideways.
Invalidation is below 19700.
bear case: Bears are now trading below the multi month and year patterns market broke above, which indeed was a bull trap. The selling was strong enough to let the bulls know the trend is long gone and they are scrambling to secure their profits. Their next target is to break below the bull trend line and below 19700, where many many more bull stops will be. Odds heavily favor the bears for more sideways to down price action.
Invalidation is above 21000.
short term: Bearish. I think we can hit 19800 and/or the bull trend line. Can we go deeper? Not likely but anything can happen. If the bull trend line breaks tomorrow, this will go full panic selling and the next support would be the 50% pb from the whole bull trend since April, which is 19180.
medium-long term: This climactic blow off top is/was the grand finale of this bull trend. Perfect break above multiple patterns which I expect is a bull trap and we will test the various support lines next before the new bear trend will unfold over the next 3-9 months. —unchanged
current swing trade: Short since 20800.
trade of the day: Sell anywhere and go away until US close.
Chart was drawn last Sunday and the big red arrow the week before or so. C target might be couple points too deep but you get the idea.
