Seasonal Context & Events

We’re now in that quiet stretch—about one, maybe two weeks out from earnings season kicking off again. No holidays on the calendar, no options expirations to wrestle with, and no end-of-month inflows or outflows distorting the tape. But it’s worth keeping in mind that we’re creeping toward the end of the quarter, and that in itself can sometimes bring its own quirks as positioning and window-dressing games start to matter. Otherwise, it’s as clean a backdrop as you’ll get—at least until earnings return to shake things up.

Key events include:

• 23rd September 16:35UTC Fed Chair Powell Speech
• 25th September 12:30UTC GDP
• 25th September 12:30UTC Initial Jobless Claims

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

In the last few weeks, I’ve been chewing on a question: where’s the actual line between hope trading and believing in yourself? Let me explain. You open a trade because you believe stock XYZ is headed somewhere—up, down, or maybe sideways. You’ve got your time horizon, anything from minutes to months. But at what point does the trade need to start paying off? More importantly, when does that little voice start whispering, “I hope it turns around”? And where’s the line between “I hope that…” and “I know what I’m doing”?

Take my last four weeks. I’ve made three trades: one beautiful call on RCL, one killer put also on RCL, and one “meh” call on DIA. The RCL call? Straight to a 100.23% gain in five trading days. The RCL put? A bit bumpier, but 259.16% in seven trading days. The DIA call? A grand total of 6.06% after five trading days. Opened it on the 11th, closed it today, the 18th (I’m writing this on the 18th).

Now, if you pull up DIA’s chart, you’ll probably ask: “Why do you always preach ‘close losing trades immediately’ and then hold this one?” Fair question. For the first three days, it was red. On the fourth, it broke even. On the fifth, a tiny gain. Why did I keep it open? Because I had enough conviction to let it run—but conviction can look a lot like hope if you squint. The reverse divergence on RSI, a rising MACD, DM positioned just right on the daily, weekly indicators pointing up, and the monthly setup whispering, “I’m going higher.” That’s what kept me in. Why it didn’t actually move? That’s on me—I didn’t study enough. But here’s the heart of it: was I hope trading? Or was I following the signals, even if the payoff was a lousy 6%?

So when is technical analysis “enough” to justify sitting through some short-term pain in your P/L? Honestly, after days of mulling it over, I still don’t know. It feels like a messy cocktail of knowledge, experience, mindset, and gut. No clean rule, no magic answer.

But two things did crystallize for me in the process:

1. If you can’t explain to yourself why you entered the trade in the first place—close it. Period.
2. If you can look at a trade and accept being wrong—defined for me as eating even a 100% loss on the stack—you’re a lot safer from slipping into pure hope trading.

That’s as close to a line as I’ve found: clarity on entry, and acceptance of loss. Everything else lives in the gray zone.

What happened last week? Forecasts pointed to a push up into the R2–R3 zone.

And guess what? Nailed it. I love it when I’m perfectly in sync with the flow. (R2 6657, R3 6664, close 6664.36 – pat pat).

Support & Resistance Levels

R3	6719
R2	6703
R1	6669
Close	6664
S1	6521
S2	6509
S3	6496

Forecasts

Let’s try to connect the dots—or at least pretend there’s a neat invisible line running through all the chaos.

We’ll start with what I think is the heaviest weight on the scale: end-of-quarter window dressing. Fund managers are shuffling things around so their reports look shiny and respectable—full of winners, none of the losers. But let’s be real: how many “big name” stocks have truly underperformed since the April dip? Not many. So, sellers may be in short supply. On the chart side, I’m seeing converging lines on the higher timeframes—think MACD above Signal but slowly drifting closer. That doesn’t scream crash, just narrowing paths where up and down can’t both stay open for a while. Add in SPXEW posting a lower high while the S&P 500 made a higher one, and you’ve got a classic “Market looks good, but not everything’s joining the party” setup. Translation: if you’re holding one of those “diversified” portfolios (a.k.a. “I don’t know what to buy so I’ll buy everything”), you probably didn’t feel the same gains as the headline index. And seasonality? August and September are supposedly the graveyard months, yet this year they’ve been oddly cheerful. Three straight weeks of climbing—maybe enough to spark some profit-taking jitters.

So what does this grand collage tell us? Pretty much the usual: nothing conclusive.

Thermometer check: DJU’s still pointing up, albeit a little bumpy. Stretched Yale’s Theory is calling for a sharp selloff after the 10th. And my own forecasts? A tilt lower after the 19th, maybe extending to the 29th. So, yeah—pick your poison.

I’d still lean bullish for the week, though I wouldn’t be surprised if we kick things off with some red. That trendline stays on my chart—I like it—and as Brian Shannon reminds us, a trendline starts losing its credibility after four touches. We’re at three so far. Could it play a role this week or next? Wouldn’t rule it out. Support levels have tightened up, which usually means the Market’s coiling for something. My view? Either we push back into the R2–R3 range, or we dip to test that trendline and then bounce back toward R1.

P.S. After April’s decline, I dug back into history to study how the Market behaves after those classic “V” bottoms. I wanted to know how far it usually recovers before smacking into resistance. For the S&P 500, the key levels I found were 6707 and 7194. That’s the yellow line you see sitting between R2 and R3—worth jotting down for future reference (next week I will change the color, I can barely see it).