Month: June 2021

The total chop-fest continued in the markets this week, even as the SPY (shown below) grinded to a new all-time high (ATH). Not much action to say the least as we go into the weekend, once again eagerly awaiting some momentum.

While the indexes were mostly flat/choppy this week, there were some pockets of the market that saw some nasty selling pressure, such as industrial stocks and transportation stocks. Take a look at names like UPS, FDX, and even CAT (which we traded profitably three times over the last few weeks). Despite their prior leadership, the bullish structure of each of these charts (shown below) broke down this week.

We are still looking for a move higher over the next few weeks for the markets, but observations like this are important, as we want to identify which group of stocks in the market are most likely to lead the way. While industrials and transports lost structure this week, we think technology (QQQ) kept up well, and is still poised for a move into new highs.

GOOGL continues to be our favorite pick when it comes to the tech names, and after closing over $15,000 of profits on the stock last week, we have initiated a few new positions here. As long as the QQQ continues to look poised for a run into new highs, we will be looking for the current 4-hour squeeze in GOOGL to fire long and push the stock toward (another) new high in the $2,450-$2,460 range.

We’re on the road this week, so we weren’t able to be as active at the charts as we’d typically like to be. However, we’ll be back to work this coming Monday, ready to take advantage of any potential momentum the market may (finally) have to offer! In this Sunday’s watch list video, we’ll dive deeper into the analysis of QQQ and GOOGL, and will take a look at a few other charts that are catching our eye, like PLBY and COST.

Enjoy your weekend, rest up, and Stay Focused!

With the market reaching that long anticipated all-time high (ATH) and then failing hard, the question becomes, “Now what?”

The biggest thing to watch and focus on is the S&P 500 Index (SPX) roll.  While this is happening, we can expect some big pops and drops. Now is the time to be picky, be fast, and to focus on A+ setups.

Stay Focused!

A reversion to the mean (RTM) can be seen as a healthy reset for stocks. So while the status of the market seems to still be “pending” there are a lot of great A+ setups we can take advantage of this week.

Here is our focus list:

NVDA – Nice squeeze under all-time high (ATH). Keeping an eye on stock split confirmation to see if it will continue to push higher.

GOOGL – Strong after a RTM last week. If it breaks 2404, then it has a chance to test ATH.

SQ – Basing at 200-day simple moving average (SMA) and forming a wedge. If it can clear 220, then it has a shot toward 223, 227, and 230.

SNOW – Breaking big resistance near 244. If it can break through 253, then we’re looking for a move toward 262.

BYND – Its daily wedge is breaking. If it breaks through 156, then it can possibly test 163 and 170.

Stay Focused!

Phase one of the squeeze, or “the buildup of energy” phase, is underway. During this phase, our job is to identify the cleanest setups the market has to offer and to begin building our positions. Phase one can last longer than we typically think, so be sure to give trades ample time until expiration.

As long as the indexes hold their bullish structure inside their daily squeezes, phase two of the squeeze, or “the release of energy” phase, is expected to bring us into new all-time highs. This should provide the momentum we need to make some profitable trades. During this second phase, tech stocks like GOOGL and MSFT are looking poised to lead the way.

Stay Focused!

The chop fest continued this week; however, the structure of the markets leads us to believe that a big move into new highs is just around the corner.

During phase one of the squeeze (the buildup of energy phase) the iron condors we’ve been selling over the last three weeks have been a great source of weekly income while making our jobs of sitting on our hands that much easier. This week we were able to close a little over $2,000 of profits from our condors.

Though the markets lacked any meaningful momentum this week we were still able to walk away with profits on our swing trades. This is one of the benefits of trading strategies like credit spreads… you get paid with the passage of time!

We were able to close both of our put credit spreads on CAT for 75%+ of max profit (good for $2,000), as well as our GOOGL spread (both shown below). We closed GOOGL this afternoon for just about 80% of max profit, which was good for a $15,300 profit (P&L below).

Both CAT and GOOGL still look poised for moves into new highs, as do a few other names we’ll be covering this weekend in Sunday’s prep time video.

The name of the game is patience right now. Patience to wait for ideal entries, patience to sit through the chop, and patience to let your trades unfold in your favor.

Phase two of the squeeze (the release of energy phase) feels like it’s just around the corner, and that’s the move (driven by the indexes) that we believe will provide our next round of profitable trades. Stay tuned for Sunday’s video, as we’ll dive into some setups we’ll be looking to trade over the next few weeks.

Stay Focused!

The overall market chopped in place this week, but finally made a really nice reversion to the mean, met with a strong dip buy opportunity. Some big names like NVDA and GOOGL are also nearing dip buy levels.

Patience is king but this could be a very good opportunity for some dip buys into next week. The Nonfarm Payroll (NFP) job report in the morning is a big catalyst to keep an eye on. NVDA also has a stock split vote coming up, so something else to keep in mind.

Stay Focused!