G. Allan Collins
Friday August 04, 2024 8:45 Am EST
Starting with the SPY, we observed a 0.29% decline, closing at 448.84. Presently, we find ourselves slightly above the crucial support zone, lying between 448 and 447.21. As things stand, there is a possibility of filling the gap at 443 if the market moves lower. Conversely, if the market gains momentum, we might witness a gap fill above 455. To navigate these scenarios prudently, I recommend managing your risk from the 448 level. Below this mark, the target is 443, while above it, we may see a move towards closing the gap above 455.
The NASDAQ 100 Triple Q’s, went down 0.16%, closing the day at 373. Caution is warranted, with a focus on managing risk from the breakdown level at 375. A potential upward move could lead to filling the gap above 380, but a rejection at 380 will most likely signal further downward movement, targeting the gap fill around 368. Paying close attention to the critical risk level at 375 is essential, as a break above 375 on heavy volume might result in a temporary higher move before encountering a 10-15% correction plus.
The Dow Jones displayed a 0.21% decline, closing at 351.99. The breakdown below the support at 353 indicates a likely move towards filling the gap at 350. Following the gap fill, the bulls may attempt to find support, which could potentially lead to a higher move, possibly towards 360. However, such a scenario appears less probable at the moment. As we progress, it’s essential to manage risk and monitor any potential break above 360, which might suggest further upward momentum.
The VIX was down 1.06% today with The VIX notably outside the Upper Bollinger Band, there’s a shot we get the VIX Crush again from these levels This implies that the market might experience upward movement, considering the VIX is now heading back towards 15, and possibly even filling the gap just above 14. We remain cautious as long as the VIX stays above 15 and the indices remain below crucial breakdown levels, now functioning as resistance. Managing risk prudently becomes paramount in this context, considering the possibility of continued selling pressure.
Shifting to Bitcoin, the current trading range is around 29,000, still below a negatively sloping 20-day moving average. To adopt a more bullish stance, it would be favorable to witness Bitcoin trading between 30,000 and 31,000, suggesting a potential breakout from its consolidation phase. However, as long as Bitcoin remains below 29,500, a bearish outlook persists, with possible support at 28,000.
Tesla saw a 2.05% gain today, closing at a quality bounce off the rising 50-day EMA of support, attempting to recover towards the negatively sloping 5-day EMA. Nevertheless, the prevailing downtrend remains intact until a clear breakout above the 270 to 274 range occurs. In such a scenario, a bullish move towards the gap fill at 289 is possible. Conversely, if the support around 250 is breached, we might expect the stock to fill the gap at 235.
Apple stock faced a decline of 0.73%, successfully filling the gap around 191. Considering the earnings announcement after the bell, expect heightened volatility in the coming days. Manage risk prudently, particularly around the 190 level, as a drop below this mark could lead to further declines towards 188, where the 50 EMA is positioned. This level is crucial as breaking below it could signify a shift from a bull trend to a correction phase. On the upside, resistance is anticipated around 192 to 194.
To sum up, the market is offering various opportunities for traders. Staying disciplined and adopting a price action-based approach can lead to profitable outcomes. Keep a close eye on the risk levels provided, as they can guide your trade plan effectively. If uncertainty persists, consider preserving capital in cash until clearer trends emerge.
Wishing you successful trading ahead.
Today’s Trade- Short Short UPST pre-market at $68.10 First Target $62 Sell Half. If we get to $55 cover the rest. GTC STOP LIMIT AT 64.78
G. Allan Collins