3/6 Daily Market Note: Dead Cat Bounce? Or Sustainable Recovery?
If Apple goes to Scenario 2, then we need NVDA to go to Scenario 3.
Note: This Daily Market Note will be a reflection on my journey throughout the day. What I saw. What I did. Why I did so. And what I see next. This helps folks visualize how I use my own plans throughout the day.
Hi Everyone,
I hope my DCF Conclusion Studies is helping the folks in navigating the timeframes you participate in (intraday, intermediate-term, or long-term). With Mag7 DCF Model Conclusions completed, in the coming weeks, I will soon shift my focus towards Key Companies in the market such as AMD, Adobe, Alibaba, and other important names that are heavily weighted in ETFs with significant Assets under Management.
I heavily use my DCF Conclusion Studies to navigate ES (S&P 500 Proxy) and NQ (Nasdaq-100 Proxy). Traders who know the Bear/Base/Bull Cases for the Mag7 stocks have a powerful incremental source of information to understand their projected influence on the indices once they reach certain regions.
So let’s recap for today.
First - overnight in China, I saw that the Hang Seng (HSI) respected the higher-low structure that I’ve been following since early February.
A constructive bid in Hang Seng is usually a rather constructive sign that NQ (Nasdaq-100 futures) may see a better day (compared to yesterday). My journal of statistics suggests that the correlation between HSI and NQ is rather high.
In the pre-market note to members on today’s context, I was looking for a few items early on in the session (I typically participate in the morning sessions. Afternoon only if something compelling):
A break below 18030 on NQ (Nasdaq-100 Proxy) could see the rally “fade back to 17975.” In terms of how folks can interpret this statement, I’m mentally bracing for a -50 point deterioration in the index if 18030 is breached. So if I wanted to go long, it wouldn’t be at 18030 on the first breach. 17975 would be a better spot as that was where I believed the rally could fade to. Low of day was 17960.
A break above 18130 was a sign to me that we could drift higher. The interpretation here is that capturing a few points above 18130 was rather reasonable probability. NQ peaked at 18170 today, offering up to +40 points from this pivot level.
Anything between 18030 and 18130 today was white noise, in my opinion.
On NQ, we can see below that we indeed tested lower to 17975 upon a break beneath support of 18030 (-50 Pt move) ✔️
We also saw bullish extension above 18130 to 18170 (+40 Pt move). ✔️
I followed my plan with my playbook and I will explain my methodology & thought process beneath the paywall below for members.
Hope you had a great day! :)