Market analysis for March 18th, 2024

Welcome back traders! Another new week. We had pretty solid results overall last week. It certainly helped to have multiple trades working at at the same time.

Mondays are usually our busiest day of the week so I'll get right into our trade docket:
/ES, /MCL, /ZN, ADBE?, BA, CCL?, DELL, DIA, GLD, GOOG, MSTR, SPX/NDX/Event contract 0DTE's, NVDA, PYPL, WYNN, FSLR, IWM, SBUX, VTI?, SPY/QQQ, VKTX

Things are starting to look interesting in the market. We are starting off the day with a rare neutral technical rating.

All three major indexes putting in their second straight week of red candles. The small caps led the charge lower while the SPY managed to contain its losses, but the move off the October lows has been undeniably powerful, and perhaps some rest is needed in the markets in the weeks to move higher.

​This week, the SPY put in a second red reversal candle in a row and closed at $509.83 (-0.37%). This is the first time this index has seen two red weeks in a row since the October lows, suggesting that perhaps a pullback is in store in the weeks to come.

​Much like the SPY, QQQ has also put in its second red candle in a row and closed the week at $433.92 (-1.16%). Also like the SPY, a pullback similar to last July would put this index back at the 2021 high.

​After last week’s Doji reversal candle, the IWM continued its push lower to close the week at $202.41 (-2.14%). Of particular concern is the rounding top visualized on the Momentum indicator, a correlation seen on the past three swing highs since June 2022.

The U.S. Federal Reserve interest rate decision and Fed Chair Jerome Powell’s post-policy meeting press conference will take center stage in the coming week. The Federal Open Market Committee is expected to hold interest rates steady for the fifth straight meeting on Wednesday, with the primary attention directed towards the central bank’s quarterly “dot plot” in its Summary of Economic Projections. U.S. rate futures have priced in an 8.1% chance of a 25 basis point rate cut at the May meeting and a 52.7% probability of a 25 basis point rate cut at the conclusion of the Fed’s June meeting.

FOMC always presents a nice opportunity for us in our live trading room:

With FOMC this week we have adequate I.V. to make our trades work. I.V. is up on all the indicies we trade.

My lean today, after two weeks a bearish action is bullish.

Intra-day levels for me:
/ES; 5230/5245/5255/5269 to the upside. 5206/5191/5182/5168 to the downside.
/NQ; 18254/18396/18442/18518 to the upside. 18202/18126/18081/18025 to the downside.

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