Welcome one and all to the Traders Market Intelligence Report, brought to you by WealthBuilderHQ.com. This update is for the week of Monday, February 27th, 2023. Let’s go ahead and dive right in.
This is kind of a two-sided conversation. This is the Fed sitting there saying, should we raise rates? We shouldn’t raise rates. We’re going too high, we’re not going high enough! It’s all over the place, depending on the Fed that you listen to. Some were “ram it down your throat,” somewhere unsure. Some say we should cut rates sooner than we do. It’s crazy what’s going on out there with the opinions not only of the Fed, but of individuals that are meant to be experts telling us what we should be looking at and what we should be looking to do. Right? To me, it all comes down to what does the chart tell us?
What do the numbers show, right? The numbers show right now when we look at the charts, so we look at the VIX Fear, fear took a major spike early in the week and had a bit of a pullback from there. I think part of it was an overreaction go figure numbers that were not accurate. Gee, did that ever happen before? Right? If we go and look at the S&P 500, we’re getting a lot closer to getting back in that downtrend, right? There’s the overall downtrend on the daily chart, right? If we bring it back in Zoom, zoom, zoom, we had this week, it happened on Wednesday. Wednesday into Thursday. We had the eight crossed down below the 21. What is that telling us? More bearishness kicking, and it was one thing to be down below the 55. We had closed below. We got back up for a day, but it didn’t matter. Friday we crashed. Big gap to the downside. We tried to win, we tried to fight. We the bulls tried to fight. They could not sustain, they couldn’t make it happen and failed right from there. All right, so where are we at now? We are in a bearish bias, not true bear, but the eight is no longer the highest moving average. What that tells me is that I am more open to taking in directional, bearish opportunity if the right one presents itself.
So when I look at this, where am I looking at now as my next targets and what am I looking at as potentials for where we go from here? Well, the very first thing is pretty straightforward, right? 3929.11. That is our .618. That is a major, major support level, and we already violated the .50 on Friday. We gapped right through it, retested it, und we failed right off of there. That 3929 level is a critical level of support. If we violate that level, we have broken the first vestige of help for the market to bounce from there. Now, does that mean that we’re gonna crash if we break that? No. It just, you’ve gotta look at the market in segments. You cannot look at this big picture and say, oh yeah, we’re going up. How do you figure that? Well, just look, we don’t gotta look at every…we don’t gotta, that’s the Brooklynese coming out. I apologize for that. We need to look at every single level on the chart and determine what’s happening. I’m not looking down here saying, oh, we’re gonna violate this level. We might, but not today, right? I’m worried about or looking at my next thought process is the 618. If we can break through the .618, even if we could chip away at the ice. You see, we did that on Wednesday and Thursday, right? Wednesday small. We had a very small break in the ice. We broke the 50, just barely pierced through Thursday. We came through much further, which gave way to say, “yep, you can go further down now.” We kind of cleared the path, just punch it one time and it’ll go and we gapped right through it retested and failed off it a little bit. We still closed on a bullish candle, but down 42 points on the day before we close the previous day.
So 3929 is the first one. 3866. If we get down there, notice we have the confluence of the downtrend line with that 38 66 level. That’s another important level in there. At that point, okay, if we go and look at a weekly chart on the S&P, there we go, we still have a lot of bullishness in the market, meaning we’re up higher than our downtrend was. But the bearishness three weeks in a row, three candles in a row has set in.
We look at the monthly, and again, it takes longer to get there, right? But we look at the monthly chart and we’ve gone flat on the monthly. We’ve had an up, a down and up, and now a down month on that bigger picture, more investor style. We go back to our daily chart. It’s pretty clear that the bears are in control at this point. Doesn’t mean we’re not going back up. It just, and listen, if we go up, what are we looking for? Get above the 3979.66 level. That’s first step. But realistically, I need it above all moving averages. That to me, puts us back in bullish territory. And now I’m ready to consider looking at bullish positions. “But Rob, you’re not giving me a direction. Is it going up or down?” Yes. And maybe sideways too. I’m not here to give you a direction. I’m here to give you points of where if we move in that direction, we have targets of where it goes. You reevaluate. If we move up above the, the 50% line, we will reevaluate. If we get above the 55, we’ll reevaluate what will the evaluation be? Well, we’ve got a fib line and two moving averages right there. So I need to get above those, right? We evaluate it every single level.
Don’t look at this [thinking]…. Remember, I am not an investor. I am not here to tell you for the next two years, five years, 10 years, the Warren Buffett model that you should buy XYZ stock and hold it for that long. That’s not what I’m doing here. Are there going to be points where you may choose to do that? Yes, I am talking about trading the market. I am talking about short term for right now. Most of it is gonna be intraday, maybe a week, couple of weeks. If you are looking at a swing trade that you’re considering for me, which I will not right now, at this point, they’re just not working for us. At least not what we do in POP, but here we look at where the market is intended to go next. Not forever, not for long term. Where’s the next place? 50th percentile on the upside. 0.618 on the downside. Those are the key levels.
All right, there you have it. Ladies and gentlemen, make it a profitable day. Stay focused on the quest to becoming a great trader. Keep crushing it and remember, you just one trade away. Make sure you go and check out our trading, like a boss.com website. Get registered for Monday’s Power Hour, and then Friday’s Trading Coaches Playbook. All right, everybody. Take care. I will see you all to the next one. Bye for now.
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