Pre-Open Commentary | Aug 5, 24

Condensed Insight Before the Bell.

Key takeways:

Paaaanic :)
That’s what I hear today morning all over the news and social media. As a trader, whenever you see this happening you should feel the urge to buy. But as a smart trader you should not rely on emotions, rather follow something a bit more reasonable. So let’s look at the situation.

Longterm - as I wrote almost two weeks ago I think, reducing long position was a good move. This is what I will typically do when I get important bearish midterm signal like TrendPhase. Is it time to add to longterm bullish position. Personally I will add 1/8 of position for a simple technical reason which is price aproaching my anchored VWAP+two other minor facts of technically oversold market:

With other moves in longterm position I want to wait for the TrendPhase to give me clear bullish signal which is still not here.

Midterm swing:
I sit on a 1/8 small long - remember I called few sessions back that in midterm market is “neutral/bullish at best”? Even though it’s a small position I think it was a bit of a mistake, that was me wanting to see neutral/bullish where it was simply neutral.

Anyway how do we look at sentiment from midterm perspective for those who are a bit lost in all the metrics:
-Most important TrendPhase is still bearish (-2)
-Profile turned bearish on friday (-1)
-Positioning/Macro turned bullish on friday close (+1)
-Dealersdash is neutral (0)

Now let’s add situational scores:
-Technical price location at VWAP (which I mentioned above) is (+1)
-Seasonality (-1)
-LongTerm Cycle (+1)
-Intraday TrendPhase (0)
- other important factors (0)

So overall score is -1 which is mildly bearish or simply neutral. This is one way to gauge your midterm situation and if you should do anything on the session with position of that time horizon.

Intraday: