Trade Plan for 6/6-6/10
Including a macro overview of oil headwinds/tailwinds and where price is going
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I had some difficulty with choosing biases last week because I was “expecting chop and whipsaw” across the board and that’s exactly what we got. Ultimately even though price action was turbulent, the markets were pretty much flat for the week, as were metals. Even crude oil could’ve gone either way, but showed some strength at the end of the week. Natural gas is still straddling the breakout.
This week we include a macro look at how oil pricing impacts sustained inflation and what factors are driving the price movements in the commodity.
Summary of Market Action Last Week:
$ES/S&P 500 Futures, $NQ/Nasdaq futures and $RTY/Small caps futures all closed red, but each by only about 1% or so. The most interesting thing about the week, in my opinion, was that the highs of last week kept happening outside of US hours. First on Monday when the market was closed for the holiday, then overnight on Thursday for a lower high. US bears were never given the chance to short the 2 highest peaks of this past week and therefore recent weeks. 🤔 Here’s the hourly chart:
I was bearish overall on the markets last week and in the $ES breakdown I gave 4183 as a powerful place for bears to pounce on the bounce. You can see that was the case. The first time price peaked above and failed and on the next attempt it was not able to close above it on the hourly.✅✅
Precious metals have shown relative strength in recent weeks, rising from depths while the markets have been red and holding steady the week before last during the frantic buying week when markets bounced 6% from the 3800 S&P 500 consensus low. I expected the metals to hold either way again last week and if you follow me on Twitter you saw me call out a ‘good risk/reward’ long scalp for the metals near the lows of the week.💰 Friday morning we saw the highs of the week for the metals, but then there was a steep decline all day putting us back to where we started along with the indices. ♻️ I was bullish overall on metals last week and even though we ended slightly red, I am happy with the scalps I took, since I labeled them as such, and we had great entry from my support levels. Profit is profit. ✅🤑
$CL/Crude Oil futures traded choppy with a push upwards at the end of the week to hold the breakout, while $XOP maintained the possible bearish divergence ending with a hammer candle. $NG/Natural Gas futures continue to straddle the weekly breakout line closing just under the weekly and daily lines. I had a low confidence bearish take on oil last week, and managed to take some profitable scalps last week that I’ll share with you in this week’s video, but I am clearly swimming against a polluted stream.
Here’s how the week closed out: