ATM Trading Club Newsletter

### Market Analysis for July 2, 2024

Reminder: The market closes early at 1 PM today due to the July 4th holiday.

### Straightforward Scenarios to Watch:

1. Bull Trap

2. Triple Tops

3. Cup and Handle

Which will play out? Stay tuned to find out!

Bull Trap

We are currently approaching an all-time high where sellers will need to defend the zone to prevent buyers from pushing prices even higher. The upper Bollinger bands on the 5-minute timeframe have been breached, indicating a short-term oversold zone.

Understanding the Triple Top Pattern:

The Triple Top Pattern is a classic bearish reversal signal that appears after a sustained uptrend. This pattern indicates a possible change in market sentiment from bullish to bearish. It consists of three successive peaks occurring at roughly the same price level, separated by two minor pullbacks. This formation suggests that buyers are struggling to push prices higher, and the resistance level is holding firm, which could lead to a price decline if the pattern completes.

In our current context, the three peaks were formed on June 20, June 28, and July 2, highlighting the resistance zone and signaling potential bearish momentum ahead.

We are also observing the formation of a Cup and Handle pattern. At the current stage, the handle is being formed. For this pattern to remain valid, the handle should not fall below the 5480 zone on the SPX. If this support zone is breached, the likelihood of the Triple Top pattern playing out increases significantly. This makes the 5480 level a crucial point to watch for confirming the market's next move.

Plays for July 2, 2024:

- Gap Up:

- If there is weakness on the MACD with instant divergence, short the market with an ATM PUT or a call vertical at the money (ATM) for an aggressive play. For a more conservative play, choose a higher strike.

- Gap Down:

- If the market gaps down towards the 5490 zone, look for divergence on the MACD. Consider a put vertical ATM or a straight ATM CALL to long the market, taking advantage of a dip buying opportunity.

As we approach the Fourth of July, let us celebrate our freedom and the opportunities that come with it. May God bless you with wisdom and success in all your trading endeavors. Enjoy this time with loved ones, and may your spirit be renewed and inspired. Happy Independence Day, and may your journey be filled with prosperity and blessings!