ATM Trading Club Newsletter

Tuesday, May 28, 2024

As we gapped up today and hit the resistance at 5315.91, we began to drift lower, eventually not only filling the gap but also testing a key support level at 5280.89. In the end, the SPX formed a hangman candle mid-range from the top, which is less significant compared to if the candle were created at the top of the range.

On the hourly timeframe, we have an upward trendline that was tested today, with the price bouncing off and testing the resistance level of 5310. This is strong bullish action that should follow up on Wednesday for a test of the 5315 level.

Levels for Wednesday:

- EMA(9): 5286.11

- MA(5): 5301.40

Both of these levels have had buyers buying the dip, providing bullish support for the bulls.

### Wednesday Play:

Call Vertical:

- If we test 5315 and fail:

- Aggressive CCS: 5320/5325

- Conservative: 5330/5335

Put Vertical:

- If we gap down, look for the bounce again with divergence on the MACD and VIX coming down:

- Aggressive: 5300/5295

- Conservative: 5290/5285

### Key Points:

- MACD: Ensure there is divergence when shorting a bull market.

- VIX: If the VIX is flat or going lower, shorting is not advisable at these levels.

- Strength/Weakness: Always confirm the presence of strength or weakness when taking these plays, as you are playing dip buying or resistance rejections.

### Warning:

Keep in mind that we have the Beige Book release at 2 PM. Although these have been non-events in the past, they have recently become significant, similar to FOMC meetings. Study price action and levels closely, and look for strength and weakness before executing a play.