8/27 Daily Recap, Outlook, and Trading Plan

Recap

Friday was a typical Jackson Hole day, characterized by unpredictability and traps. As predicted, the day saw extensive trapping where the price would make an initial move, trap traders, reverse, and then repeat. Despite the volatility, bulls won the day, maintaining control as long as the 4408 level held.

Market Outlook: Neutral to Bullish

Key Structures

There are several key structures to watch. The large rising uptrend channel in white, which failed on Tuesday, August 15th, causing a 120 point flush, needs to reclaim to set a definitive bottom. The yellow channel, a failed bull flag with 4523 resistance and support around 4408-10, needs to be re-entered by the bulls. Lastly, the head and shoulders pattern built since mid-June tried to breakdown the "neckline" at 4375 Thursday and failed, indicating a bullish failed breakdown.

Support Levels

Supports are at 4408-10 (major), 4402, 4382-85 (major), 4375 (major), 4363, 4357 (major), 4348, 4339 (major), 4328, 4319-23 (major), 4311, 4298-4301 (major), 4282-86 (major), 4272, 4266, 4247 (major), 4235 (major).

Resistance Levels

Resistances are at 4423 (major), 4429,4437-40 (major), 4448, 4453 (major), 4467, 4474 (major), 4482, 4487-92 (major), 4499, 4512 (major), 4522 (major), 4527, 4540-45 (major), 4554, 4560, 4566-68, 4576-80 (major), 4592, 4598, 4607-09 (major).

Trading Plan

For Monday, the bull case remains the same. As long as the level of 4408 is maintained, the rally is alive. The bear case requires the level of 4375 to fail. In both cases, it is essential to see the level fully accepted before attempting shorts or longs. If 4408 fails, we play the levels. If 4375 fails, we free fall.

Wrap Up

In summary, we are still in deep chop around the 4408 magnet. My general lean as of now is that as long as 4408-10 keeps holding, we can base build then continue up the levels. If 4408 fails, we play the levels. If 4375 fails, we free fall. As always, trade with caution and don't chase.

Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
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