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Market Timing

Knowing When to Trade and Adjust Your Portfolio

In the world of trading and investment, timing is everything. Knowing when to seize opportunities and when to stay on the sidelines can make or break your portfolio's success. Let’s explore the crucial factors that can help you understand when to trade and when to make adjustments to your investment portfolio. We'll also explore the difference between major swing and intraday levels and how they can guide your decision-making process.

1. Identifying Market Momentum

One of the first things you must master as a trader or investor is recognizing market momentum. Momentum can be defined as the strength and direction of the market's current trend. Identifying whether the market is bullish or bearish and whether the momentum is strong or weak is vital.

For our sentiment analysis traders;

(In this context, sentiment analysis involves assessing and interpreting market sentiment, which is the collective feeling or mood of investors and traders regarding a particular security, market, or asset.)

It’s key to pay attention to the holistic view of the market, seasonalities, economic issues, banks, bonds, and other key ball players on Wall Street.

For our technical traders, key indicators like moving averages, volume profile, Relative Strength Index (RSI), and MACD can help you gauge momentum or, at minimum, hint if momentum may change in the near term.

2. Recognizing Trading Ranges

Markets sometimes trend inconsistently. There are periods when they move within a range, and understanding this is crucial. When a market is in a trading range, it's neither significantly trending upwards nor downwards. Recognizing these ranges allows you to adjust your strategy accordingly, such as employing range-bound trading strategies or, as we sometimes prefer, ‘do nothing at all.’

3. News-Driven Markets and Stagnation

First, we need to discuss the impact of key data. Key economic data and news events often profoundly affect the financial markets. It's essential to monitor the economic calendar to anticipate significant data releases. Markets can become highly volatile around these times, and knowing when important data is due can help you avoid unnecessary risks or capitalize on opportunities.

In some instances, a market might become overly reliant on news and data releases, responding to each piece of information with swift price movements. However, the market can stagnate during a week with low news impact. Exercising patience and avoiding making impulsive decisions during such periods is crucial.

4. Major Swing Levels vs. Major Intraday Levels

Understanding the difference between major swing levels and major intraday levels is a key aspect of market analysis. Major swing levels represent significant price levels the market has struggled to breach over an extended period, often visible on weekly or daily charts.

These levels serve as solid support or resistance. In contrast, major intraday levels are price points that influence the trading day but may not hold the same significance as swing levels.

In the dynamic world of trading and investment, understanding when to trade and when to make portfolio adjustments is essential. Recognizing market momentum, identifying trading ranges, and monitoring key data are all critical components of successful trading and investing. Moreover, distinguishing between major swing levels and intraday levels can help you make more informed decisions. So, remember to exercise patience and precision and base your actions on a well-informed analysis of the markets.

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^{INTRADAY SESSION PLAN}

TRADING LEVELS

CPI data will be released this morning. On an intraday time frame, 4480 can trade if 4450 is supported. Lower levels near 4400-4410 are expected if 4450 acts as resistance. /ES is now trading at 4428. If we have a daily close under this 4430-50 range, we could start a downtrend heading into Friday.

$TSLA earnings are coming next week on the 18th. SWS is already long $TSLA and $SPY with a quarter of our usual position size. However, we are prepared for $TSLA’s earnings to rip or dip. Key areas for us are 240 and 270. If this support doesn’t break, we will not start a downtrend. We will not begin an uptrend if $TSLA cannot overcome 270. The latest data on $TSLA were its bad delivery numbers, so staying patient and seeing how those numbers could reflect on their earnings report will be important.

In the long term, though it doesn’t seem as if we will reach out massive 4150-4170 E-mini support, the overall market could take a turn to a mid-term rally into November/December, assuming dips no lower than my levels continue to get bought.

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