Day Trading Strategy for Equities, Commodities, and Bonds - 4 Nov 24

"Success in trading is not measured by how often you're right, but by how well you manage when you're wrong. Stay disciplined, stay prepared, and remember: patience and strategy win over impulse every time."

Detailed Market Overview:

On November 4, 2024, U.S. equity futures are signaling mixed market sentiment amid continued political uncertainty, economic data considerations, and fluctuating global conditions. The Dow Jones futures (YM=F) are down 36 points at 42173, Nasdaq futures (NQ=F) have slipped 19.5 points to 20133.75, while S&P 500 futures (ES=F) are slightly positive at 5761, up 2.75 points. The Russell 2000 futures (RTY=F) show a minor dip of 1.3 points at 2219.3. Gold (GC=F) is up 6.8 points at 2756, signaling safe-haven demand, while crude oil (CL=F) rises 1.92% to $71.41 amid recent energy news. Treasury bond futures indicate buying interest, with ZB (30-Year) up 1.375 at 118.1875 and ZN (10-Year) up 0.578125 at 110.609375. The VIX has increased to 22.47, reflecting elevated market volatility, and the U.S. Dollar Index (DX-Y.NYB) is down to 103.638.

Technical Analysis:

• YM (Dow Jones Futures):

  • Resistance Levels: 42277 (intraday high), 42500 (psychological level)

  • Support Levels: 42043 (overnight low), 41850

  • Indicators: RSI near 55 suggests neutral momentum with potential for upward push.

• NQ (Nasdaq Futures):

  • Resistance Levels: 20248.5, 20300

  • Support Levels: 20070.5, 19950

  • Indicators: RSI hovering at 58, indicating moderately bullish potential.

• ES (S&P 500 Futures):

  • Resistance Levels: 5776.5, 5800

  • Support Levels: 5740, 5700

  • Indicators: RSI around 61 points to sustained bullish momentum with possible testing of higher resistance.

• RTY (Russell 2000 Futures):

  • Resistance Levels: 2225.5, 2235

  • Support Levels: 2203.3, 2185

  • Indicators: RSI at 52, indicating a potential consolidation phase.

• GC (Gold Futures):

  • Resistance Levels: 2756.6, 2780

  • Support Levels: 2739.4, 2700

  • Indicators: Gold’s RSI at 65 signals strong bullish interest driven by market volatility.

• CL (Crude Oil Futures):

  • Resistance Levels: 71.81, 73

  • Support Levels: 70.25, 68.5

  • Indicators: RSI at 67 suggests upward momentum as crude oil reacts to recent geopolitical news.

• ZB (30-Year Treasury Bond Futures):

  • Resistance Levels: 118.5, 119

  • Support Levels: 117.281, 116.5

  • Indicators: RSI at 59 indicates ongoing bullish demand.

• ZN (10-Year Treasury Note Futures):

  • Resistance Levels: 110.75, 111

  • Support Levels: 110.281, 110

  • Indicators: RSI at 63 shows consistent buying pressure.

Trend Identification:

• YM, NQ, and ES are in a cautiously bullish trend, supported by positive economic news and strong earnings, although election-related risks linger.

• GC (Gold) continues its upward trend, driven by safe-haven buying.

• CL (Crude Oil) shows a rebound trend amid supply concerns.

• Treasuries (ZB and ZN) indicate sustained demand, showcasing a risk-off sentiment.

Trading Scenarios:

1. YM (Dow Jones Futures):

   • Bullish Scenario: Long above 42200, targeting 42500. Stop-loss at 42000.

   • Bearish Scenario: Short below 42050, targeting 41850. Stop-loss at 42200.

2. NQ (Nasdaq Futures):

   • Bullish Scenario: Enter long above 20250, aiming for 20300. Stop-loss at 20150.

   • Bearish Scenario: Short below 20070, with a target at 19950. Stop-loss at 20200.

3. ES (S&P 500 Futures):

   • Bullish Scenario: Go long above 5776.5, aiming for 5800. Stop-loss at 5750.

   • Bearish Scenario: Short below 5740, targeting 5700. Stop-loss at 5760.

4. RTY (Russell 2000 Futures):

   • Bullish Scenario: Buy above 2225.5, targeting 2235. Stop-loss at 2210.

   • Bearish Scenario: Short below 2203.3, with a target at 2185. Stop-loss at 2220.

5. GC (Gold Futures):

   • Bullish Scenario: Long above 2757, targeting 2780. Stop-loss at 2740.

   • Bearish Scenario: Short below 2740, targeting 2700. Stop-loss at 2755.

6. CL (Crude Oil Futures):

   • Bullish Scenario: Buy above 71.5, aiming for 73. Stop-loss at 70.5.

   • Bearish Scenario: Short below 70.25, targeting 68.5. Stop-loss at 71.

7. ZB (30-Year Treasury Bond Futures):

   • Bullish Scenario: Enter long above 118.2, targeting 119. Stop-loss at 117.5.

   • Bearish Scenario: Short below 117.3, targeting 116.5. Stop-loss at 118.

8. ZN (10-Year Treasury Note Futures):

   • Bullish Scenario: Buy above 110.65, aiming for 111. Stop-loss at 110.4.

   • Bearish Scenario: Short below 110.3, targeting 110. Stop-loss at 110.6.

Volatility Insights:

The VIX increase to 22.47 reflects heightened caution, likely influenced by political developments and global economic data. Articles such as “Dollar Weakens as US Polls Signal Election Shifts” suggest potential for increased volatility, particularly in response to geopolitical headlines and Fed policy speculation.

Conclusion:

Pre-market conditions point to cautious optimism in equities with underlying risks. Gold and Treasuries continue to attract buyers amid uncertain conditions, while oil shows strength from supply dynamics. Tactical entry and exit points remain key for effective risk management given the elevated VIX levels and the market’s sensitivity to news flow.

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