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Week of Jan 28

Updated: Feb 3

New All Time Highs!

Same headlines as last week - with one added twist.

You are going to see this headline plastered all over the news for the next few days - but from here - where do we go now?

I am flat the market currently and am looking for a confirmation of the breakout - although I suspect this was as last push to run the shorts out and force all the money mangers in long due to career risk.

This could prove to be a massive bull trap as the market makers use all these bulls as exit liquidity to reverse the market - so the theme for this week is going to be patience.

Moving forward, I will be addressing things from a slightly different format.

This simpler format will make it easier to read, and provide context. I take my overall general bias from the Highest possible Time Frame that I can - which is typically the Monthly chart (sometimes the weekly.). From here, I drop into a corresponding Mid-Time Frame chart such as the 1hr or the 4hr chart to look for buy or sell models to develop and confirm.

Just remember:

1 Month high Time Frame, corresponds to the 1 day Mid Time Frame.

1 Week high Time Frame, corresponds to the 4hr Mid Time Frame.

DXY:  DXY remained flat on the week consolidating, but this still looks to be wanting to head for the 107 area. The Monthly Chart chart shows a IRL run and now we are looking for the next swing ERL area - which is up at the 107 area.

Dropping into a daily chart of DXY - you can see that it is respecting the daily FVGs and is in the 2nd mitigation block - a break out of the Jan highs and DXY will ZOOM to that 107 area. Retail logic will see a inverse Head & Shoulders(IHS) on the Daily DXY and notice the measured move is right into the area I am anticipating - but it has more to do with where resting liquidity pools are, rather than retail logic chart patterns.

This bullish DXY will put pressure on commodities as I think Oil is reaching for liquidity to begin a massive sell program.

Energies:  After MONTHS of consolidation, Oil is finally making a last run at some stops before the Market Makers can counterparty the orders and get short oil. In order for a market to change direction, it requires a change in order flow. The way this is accomplished is the Market Makers (MM) will push price to an area of liquidity where resting stop orders are - and run them to counter party the orders.

Oil is entering its monthly IRL/FVG area as the daily reaches for those old highs at the 79.9 level. I want to see this run on the daily level, and then we will wait for confirmation of the drop before entering a short. IF they take out 79, they might shoot for a a weekly volume imbalance around $85.

Either way, once Oil peaks, my s hort target would be about a 20% drop down around $64 on WTI

Interest Rates:  No real weekly change on the 2s/10s curve thus far. We are still inverted from record levels and still in record duration of inversion. I expect to see SOMETHING happen with the curve by March as the BTFP (Regional Bank Bailout Program) come to a close - but that is another story.

VIX:  VIX was flat on the week - but we are still setting up for a big VIX spike if we get the index rejection we are looking for.

So here is the setup for this week;

  • Patience!  We can't do anything until we see a market structure shift on the 1hr / 4hr charts - this will translate up into the higher Time Frames.

  • VIX is ready to pop higher - Powell/FOMC on Thursday might provide some fuel.

  • NQ is now at b-adj ATH and we don't buy at ATH. I am waiting for a daily shift in market structure to look for short entries.

Until next week - We'll be watching.

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