HaiKhuu Daily Report 10/04/2023
Good morning and happy Tuesday! Hope you all are ready for what is gonna be another confusing day for the markets. Historically, via the traders’ almanac, today IS a bullish day for the markets, but market conditions have not followed historical trends, and are looking exceptionally weak right now. $SPY has made new four-month lows, and we are still looking at a lot of organizations that are heavily weighted in $SPY still being extremely over-priced. This is going to cause a significant amount of tension in the markets, which will result in conflicting sentiment. I’ll talk more about this later on in the report, but please continue to be careful and cautious as we are continuing to come down in the short term.
Look for opportunities to capitalize on some bullish momentum in the markets, as once we start to move up, it will be an extremely large momentum-based movement, but until then, conditions are going to be choppy and confusing. There are many great allocations in the markets at the moment, so allocate wisely as many organizations are at a steep discount at the moment.
As always, practice safe risk management and limit your downside risk where possible, but look to take on some exposure today so you can realize some gains.
Good luck trading, and carpe diem. Let’s have a great time and make the most out of today.
The updated $SPY daily levels are as follows:
Conversion Line Resistance: $427.09
Base Line Resistance: $436.87
Weak Psychological Resistance: $430
Weak Psychological Resistance: $425
Strong Psychological Support: $420
Daily Cloud Resistance: $442.67
$SPY Daily Candles - New 3 Month Low [10/03/2023]
Thoughts & Comments from Yesterday, 10/03/2023
Yesterday was a bloody day for the overall markets and we all saw how difficult it was to navigate it in real time. There was a significant amount of unrealized losses that were incurred as a result of us hitting new lows. There were many great opportunities to scalp and trade, and I hope you all were able to come out of yesterday unscathed.
We started the day off looking weak, but an opportunity to trade the $425 support level on $SPY. We opened the day with $SPY trading at $425.04, down from the previous close of $427.31, and showed signs of weakness throughout the entire morning as we consistently chopped around the $425 level. There was strength at open which provided us an amazing opportunity to scalp the short-lived confidence in the markets.
As the markets pushed up, we saw a lot of traders in the community were able to take profit and generate a significant amount of realized gains within the first half hour of the day, which was genuinely a phenomenal time, and then we watched as employment data came out, which caused the markets to fall extremely heavily as a result and solidify the bearish momentum for the day. We quickly went from the official high of the day with $SPY trading at $426.64, to continually selling off, through lunch and signifying a significant amount of weakness.
$SPY made a relative low testing the $420 support towards the back half of the lunchtime session, and quickly bounced back as market momentum and buying volume picked up as $SPY got to $422 and chopped around that area for a couple of hours in the afternoon.
Getting into the back half of the day, we watched as the markets came back down, and continually tested the $420 support level, chopping around and not providing us with many opportunities to trade or allocate with confidence. There were not many opportunities to trade unless you wanted to take on a significant amount of risk, and $SPY went on to make the official low of the day trading at $420.18.
During power hour, we saw a lot of chop in the overall markets until we saw a slight breakout, providing us with a great opportunity to scalp into close, but it did not provide us with any opportunities to increase confidence in the overall market conditions. We ended the day with $SPY trading at $421.59, down $5.72 for the day, or down approximately 1.34%, with an intraday bearish movement of 0.8%.
As I said before, it was an extremely difficult day for the markets that did not provide us with many opportunities to realize any sort of significant gains. Energy was a phenomenal sector as it remained green despite everything else being bloody and red, but C’est la vie, that is the reason for diversifying amongst the sectors. I hope you all did alright and were able to survive the conditions of yesterday and let’s just see what today has in store for us.
Heatmap - $SPY 10/03/2023
Thoughts & Comments for Today, 10/04/2023
Today is going to be a day full of confusion and opportunity. I hope you all are excited and ready to see what these conditions have in store for us.
This is a state of confusion in the markets, where we do not know if we are coming up or going down, but if people are not fluid, and are fixated on a single direction they want the markets to go, those are the individuals who are going to have the toughest time. From an unbiased standpoint, here are my thoughts.
As I said before, there are a lot of conflicting sentiments in the markets, that will ultimately lead to a significant amount of chop and realized losses. We have seen a significant amount of selling over the previous couple of weeks, and we are due for some short-term bullish momentum in the markets. But despite the fact that we are “due” for some short-term momentum, does not mean that it will come. The markets can stay irrational longer than we can stay solvent. We can very easily see a quick and beautiful rally in the markets that provides us with short-term confidence and the ability to capitalize on some bullish momentum in the markets, but at the same time, we are still showing significant signs of weakness.
Many of the mega-caps are highly overvalued right now trading at a significant premium, but are continuing to show signs of strength to sustain the markets where they are at the moment, and that is concerning. In the short term, this is going to provide us a “safe” play, mostly if you are looking to actively day trade and scalp, but despite this being “safe” in the short term, once we start to see signs of fatigue, organizations like $NVDA are going to age like spoiled milk.
Once these mega-caps start to show weakness, as there is no buying, and more people are looking for cash reserves and safety, we are going to see a significant amount of selling of the highest overpriced equities, resulting in the markets coming down significantly. We are already seeing this with organizations like $TSLA dropping 10%~ roughly in 2 weeks, and knowing that there is a significant amount of downside and fall risk Once $NVDA becomes the final nail in the coffin once it breaks and holds below $400, there is going to be a significant amount of selling coming from the semi-conductor markets that go on and ultimately impact general tech and retail sentiment.
Again, I am not saying to be hyper bullish or bearish in the markets right now, but look to be fluid with any allocations you can make, and only take positions you are comfortable and confident in, and know the risks that are involved in the markets right now. I would not advise being overly ambitious in these conditions but look to take advantage of the opportunities that are available to us. There are many underpriced equities that in the short term are going to provide us with an amazing opportunity to buy and hold, but at the same time, there are many highly overpriced equities that will drive the markets down in the short term.
Look to trade when given an opportunity to do so, look to buy value now, and stay away from highly speculative organizations as those will ultimately have the largest bearish movement in the markets.
For myself personally, my sentiment on how to allocate in the markets has remained the same. I will look for opportunities to scalp with confidence and look to capitalize on the short-term momentum in the markets, but at the same time, we are seeing a lot of reasons why you should not allocate heavily to the markets right now. I do not anticipate buying and holding any tech, nor anticipate entering into any soon as a long position, but I will be looking for opportunities to actively trade them with confidence over the next couple of days as they will provide us some amazing opportunities to trade while volatility is high. I am very interested in selling CSPs while volatility has increased, but it is just a matter of finding general exposure that I personally am comfortable holding in the short term, that will allow for opportunities to sell with confidence.
Just continue to practice safe risk management in these market conditions and do what you can to realize gains in these conditions. A lot of people are going to have an extremely difficult time, so attempt to remain consistent and look to limit your downside risk as much as possible.
If you want to watch any of my allocations, they will be posted live in the HaiKhuu Discord.
HaiKhuu Proprietary Algorithm Report:
Yesterday was an amazing day for our systems. The long-term portfolio was able to outreturn the markets by a significant margin and I am very happy seeing those results on an intraday basis. The biggest thing that I think we all have failed to capitalize on in the short term, is the sector-neutral hedge strategies. If you were taking a continued position utilizing the sector-neutral hedges while market conditions have been weak, but still wanted to have exposure in the markets, you would have been able to outperform the markets with ease, while still retaining exposure. This has been an interesting time for our systems and we still plan on changing these systems up in the short term to provide us with a new portfolio to trade on, and a new upgraded algorithmic system that should outperform the markets by a sizable margin. We still anticipate the live beta test to start on Monday, so be on the lookout for that!
To get an in-depth analysis of our algorithms' performance, check out Asher’s Report!
The results of yesterday are as follows:
Baseline:
$SPY: -0.80%
Our Results:
Long Term Portfolio: +0.47%
Variable Sector Neutral: +0.4%
Sector Neutral: +0.2%
Variable Market Neutral: -0.17%
Base Algorithm: -0.18%
Market Neutral: -0.2%
As I said before, the algorithm is on a tentative hold at this time as a result of market conditions not being favorable and us not wanting to provide positions that are not consistent and not up to our personal standards. We are continuing to provide these positions for complete transparency and consistency's sake, but just note that HaiKhuu is not endorsing any of these positions. Please take these all at your own risk, and make sure you are practicing safe risk management if you are attempting to allocate into any of these positions.
DISCLAIMER - This is not financial advice. Utilize these trades with caution. These predictions are generated via our proprietary trading algorithm without taking into account market conditions, news, or any external biases. This is not a signal to buy or sell any equities, and we do not guarantee success. Take these at your own risk.
Algorithmic Alerts for 10/04/2023
My Personal Watchlist :
Note, just because something is on my watchlist does not mean it is a signal to buy or sell any equities
Watchlist:
$SPY , $NVDA , $DIS , $TSLA , $KO , $DG , $AAPL , $TAP*
Position Opportunities:
Follow the market momentum
Limit your downside risk
Hold cash & prepare to allocate into the markets
LONG OPPORTUNITIES:
Long-Term Dividend - $GAIN / $JEPI
Long-Term Investment - $DIS / $DG
Economic News for 10/04/2023
ADP Employment Change - 8:15 AM ET
S&P Services PMI Final - 9:45 AM ET
S&P Composite PMI Final - 9:45 AM ET
Factory Orders - 10 AM ET
ISM Services PMI - 10:00 AM ET
Durable Goods Revised - 10 AM ET
Notable Earnings for 10/04/2023
Pre-Market Earnings:
Tilray (TLRY)
Helen of Troy (HELE)
RPM International (RPM)
Angiodynamics (ANGO)
After-Market Earnings:
Accolade (ACCD)
Resources Connection (RGP)
Wrap up
Overall, this should be an extremely interesting time for the markets that provide us with opportunities to trade and realize gains but provide a significant amount of confusion and chop. So limit your general risks, and make sure you are capitalizing on the opportunities that are available to us. Make some smart decisions, and realize some gains while you can. Market conditions are optimal to see a quick bounce, but be careful and cautious.
Good luck trading and let’s see what the markets have in store for us.