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Week of December 24th

Updated: Dec 24, 2023

The market will remain Bullish - until its not!

What scares a lot of people out of riding a rising market at ATH - is the inability to see what it is we are reaching for. I 100% understand this but at the end of the day - we are looking for dips to buy and remain long until we see a Market Structure shift on the 4h chart. This is the final week of 2023 markets and I expect to see very light volume - 2024 will be a special year.

I will follow the same flow as last week in the layout of charts and my take on the market. There are some interesting market shifts that we are watching that could be the start of a really interesting trend change in markets.

DXY:  last week, we saw the weekly IRL area hold- making me think the next stop is going to ERL, We have some weekly Relative Equal Highs (REH) at 104.234 that is the next draw on liquidity. The caveat here - is that a rising DXY will put pressure on commodities and stocks in general.

10yr Interest Rate: The 10yr filled its weekly FVG IRL that we were looking for - but it went even a smidge lower to fill in a weekly weekly volume imbalance before bouncing. Much like DXY, I am expecting the 10yr to start its ascent.

The US Government has way to much debt, and it can't afford the interest payments up here as the debt service alone, is larger than the defense budget. The perverse thing about this - is the market knows this and will start to command a higher interest rate due to the risk associated with a sovereign debt pressure. Stock have been surging lately on the promise of cheap money from the Fed - so this is the chart that will dictate EVERYTHING. The single trade that NOBODY is positioned for - is higher rates.

VIX:  After filling all the lower gaps on VIX from 2020 - we finally saw some volatility come back into the market - and the VIX behaved exactly the way we wanted to see. The 4h VIX shows the tale of us taking out the REH and now we are back-testing a 4h FVG.

IF the VIX bounces from here - its going to be putting pressure on the indexes - which everyone and their pet rock are currently max long.

Energies:   OIl & Natural Gas look to be bottoming down here, but it could just be a reaction to the DXY - I want to give them another week to present cleaner charts before I engage them.

Indexes: We will be focusing on the Nasdaq this week - as that is where all the 'hot' money is currently flowing due to the Magnificent 7.

Nasdaq - nATH this week on Nazzy! The hard part about charts that are at ATH - is we have no target to aim for on longs. Thus, we are forced to stay long the market so long as the 4h chart is bullish. We had a nice sell off on Wed afternoon- and so long as those lows hold, I am looking to buy any dips into this zone.

It's a little more clear on the ES, but the same general idea flows - we are bullish on buying dips until we see a Market Structure shift on the 4h.

I am uncomfortably long up here - but we are bullish until we get a market structure shift.

The most scary idea for Bulls, will be if we start to see "The 3 Horsemen" of the DXY, the 10yr, and VIX all start to climb from here. Once we get into January the markets are currently positioned for an accident and all the ingredients are there.. Once we roll into 2024 I can look for a quarterly shift objective - but as it stands right now we could be shooting for 13k or so in Q1 which would be a 25% drop from here.

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