Market Plan for December 4th, 2023

Bearish engulfing?

Good evening folks,

Hope you all enjoyed the weekend. Like most Fridays recently, last Friday had a huge short squeeze and a large green daily candle. It concluded nearly two weeks of being stuck in a 30-point range. In Thursday’s post, I stated that recent price action was mildly bullish.

Today’s candle is a mildly bullish sign, as it’s tested the highs yet again. We don’t like seeing levels tested too many times, or they’re bound to break.

It’s not always easy to pick a direction with strong conviction when we’re in a range, but there were a few signs that showed us we were bound to break out. Friday’s candle was a strong breakout, fueled by Powell’s speech.

Now we’re in a delicate spot where we’re in the “middle” of a breakout, but headed into heavy resistance. Does this week start with a continued breakout, or will we make lower lows and start the descent? Here’s my plan: