We have finally made it to the official weekend change over for Discord/ Substack! As of now I have unlocked the discord for all… PLEASE read the announcement. It makes things very clear and black/ white.
Substack/ Daily Newsletter. Today is the LAST official FREE daily newsletter. Beginning Monday you will need to have a PAID substack subscription (DaddyDersch is the name to search) in order to receive the daily TA by email! I will occasionally post a free TA here and there on Fridays but for the most part that is where you need to go. I did go ahead and open that up and I do see you guys already signing up which is awesome!
Coming into this week markets have really been giving off some terrible price action. We really have reached the buy the dip market. The last 2-3 days especially were brutal for anyone that trusted short. Not only that but we are getting some extremely tight ranges that refuse to break. It really is making winning hard.
With PPI on Wednesday coming in COLD but getting sold off I am still shocked that the CPI data (which was not cold) got bought up and I am honestly a big more surprised that today didn’t sell off.
Next week is FOMC on Wednesday. That is the big one. I am VERY curious what the fed will do. Not only that but we are going to get a new DOT PLOT… that makes this Wednesday FOMC even more spicy.
Despite the data the markets continue to price in a 25bps cut for the fed meeting. At 96.4% odds that is pretty firm by the market. However, I just can still not personally fathom how that is going to play out. Now with that being said this does remind me of June 2022 FOMC where the Monday before the fed whispers Nick T released and article detailing the big fed change against what was priced in. There is a potential that we could get a tweet by him that would claim no rate change at the meeting. IF that comes in we could see a very fast and very wildly aggressive sell off.
Now IF the fed does cut Wednesday the only justifiable reason they would have is that they moved the goal post from 2% to 3% for the target fed funds rate… I would be curious to see how the market would react to that news.
The big ticket item though is the DOT PLOT. For those of you that do not know every 3 months the fed updates the dot plot which essentially is the feds funds rate change projections for the next few years. I will be very curious on the back of rising CPI how the fed reacts…
SPY/ ES WEEKLY
After ES/ SPY spent almost 4 weeks stuck attempting to breakout it would appear that the next leg up in the market has begun. This is one of those times where its easy to say “XYZ is happening so we should go short” and when in reality the market is likely to just keep pushing…
To put things into perspective here for the bullishness that we are seeing… markets just re-entered extreme daily bull momentum, we continue to be in extreme weekly bull momentum since June, we just put in a new demand/ support at 637.21/6480 after a 8ema weekly support test and we have new weekly buyers. Truly there is just no reason to see anything but up.
Now of course FOMC could change everything… but I would not put my eggs in the bear basket for fomc… 90% of the time events/ data are bullishly received (even if they are not actually good news…).
SPY WEEKLY
Supply- 609.64
Demand- 637.21 -> 621.49
ES WEEKLY
Supply- 6130
Demand- 6480 -> 6262
QQQ/ NQ WEEKLY
When we look at QQQ/ NQ there are some similarities between ES/ SPY but there are also quite a few differences that need noted.
Largely while ES/ SPY spent the last 4 weeks flat on NQ we actually has a “significant” pullback that tested near 20ema support and 8ema weekly support. The setup I am seeing here now with a new ATH finally reached after 4 weeks of trying is a big ole bull flag. That breakout could come and should come next week.
Much like ES/ SPY there is pretty overwhelming bullishness that makes it VERY difficult to even think about downside…. 570.26/23450 is demand/ support along with 8ema support. Not only that but again since June we have been in extreme weekly bull momentum and the daily also just re-entered extreme bull momentum. The one oddity is that NQ has NOT seen stronger weekly buyers since its previous ATH 4 weeks ago (which means price is NOT justified) however on QQQ we have seen stronger weekly buyers for two weeks in a row… so that is something to keep in mind…
QQQ WEEKLY
Supply- 577.46 -> 538.18
Demand- 570.26 -> 553.94
NQ WEEKLY
Supply- 23800
Demand- 23450 -> 22859
VX/ VIX DAILY
A little bit of an unexpected move here on VX/ VIX compared to the market movement. Today we finally came down and bounced off that 15.16-15.32/ 14.41 (to the penny on VIX) demand/ support area I was talking about. Not only that but we actually put in new demand/ supports on both at 15.65/ 14.7. These doji candles (especially VX) area actually pretty high probabililty upside pops that would take market lower. While I just got done telling you that everything is screaming bullish there is an interesting trend on the daily for ES/ NQ of red day -> 2 green days -> red day. We just finished out 2 green days which COULD mean a red day is coming Monday.
Now also we have to keep in mind the market knows FOMC is Wednesday and knows dot plot is Wednesday too so there is a potential that we could just be seeing some downside protections being put on. I will actually be curious to see where Vx/ VIX goes Monday and Tuesday.
If I was strictly looking at VX/ VIX I would generally bet on a pop to 16.21/ 15.13 and a red market day…
BITCOIN DAILY
Looking at Bitcoin here we are seeing a beautiful cup and handle formed now. The previous ATHs on 8/14 at 125,200 should be our target. Generally speaking we came down and retested a major support at the 100ema. With 8/20ema crossing bullishly back over the 50ema that should be our upside signal.
I Would need to see BTC close over 117,271 on the daily and I would generally again look for 123,661 supply followed by a new ATHs. That new ATHs pattern has usually resulted in about 2 weeks of consolidation. The area of 102,219-111,887 is now what I would consider extreme demand/ support. That area would need to be CLOSED under on the daily for anyone to justify a long term bearish outlook.
WEEKLY TRADING LOG
Its ironic that some of my “best” weeks or months of profit are those weeks where I feel the worse. I was happy to take a nice payout on Monday and Tuesday. However after blowing my accounts on Thursday it was a big struggle. The price action the last two days was so brutally tight and choppy that the strategy I usually use to pass evals was very difficult. I was left stop loss hunted numerous times before I finally today was able to pass 6 more FNF evals.
I will start back Monday with 6 funded… looking for my 3 days of profit to then request 9k in payouts. The last two days were certainly not my best work. I will be looking to reset mentally this weekend and be ready to tackle the market Monday.
