Check out this week’s video to find out which sectors held up this week, who got crushed, and what still looks promising. The technology sector has been leading the markets higher to new all-time highs this week and ended the week slightly lower, signaling for a potential flush down to the 21 exponential moving average. Is there more downside to come?
The S&P 500 (SPY) and Nasdaq (QQQ) futures closed under their daily 8 exponential moving average (EMA) last week. This sets us up to see a potential flush down to the 21 EMA.
If we revert to the mean (at the 21 EMA), this would be our first “meaningful” dip in weeks. This could serve as our next opportunity to enter a long position if the markets hold support there.
Bullish sectors like technology and semiconductors came down to earth with the overall market last week. These are the first two spots we’ll be looking to potentially buy this dip, as both QQQ and SMH, the technology and semiconductor futures respectively, continue to look incredibly bullish on a weekly chart. Watch the video above for more details on what we’ll be keeping an eye on this week.
Stay Focused!
After the markets moved back and forth and pushed to new all-time highs, we ended the week slightly lower. We’re seeing some potential signs setting up for a pullback to the daily 21 exponential moving average. Which sectors should we focus on for clean, high probability trades?
After a few new highs and a lot of back and forth action this week, the markets showed some potential signs (see charts below) of setting up for a pullback to the daily 21 exponential moving average (EMA).
The Nasdaq (NQ) and S&P 500 (ES), the QQQ and SPY futures respectively, closed underneath their daily 8 EMA today. This type of action opens the door for a potential reversion to the mean (at the 21 EMA). That’s going to be our major focus next week, as a dip to the 21 EMA would be the market’s first healthy “reset” in weeks.
Should we dip to the 21 EMA, patience will still be warranted. The reversion to the mean is the first step. The second step is for the markets to confirm support at that level. The third step is to start looking for entries in the cleanest setups possible.
At the top of our watchlist are the technology and semiconductor sectors. Technology has been the clear leader as of late, and a dip to the 21 EMA could serve as a good spot to look for new entries for any potential last-minute move higher into earnings. As for the semiconductors, that weekly squeeze is one of our favorites right now (see chart below).
Any downside here could serve as a great opportunity to get long in the areas of the market we are stalking, but we won’t rush into entries right away. In this Sunday’s video, we’ll cover a few of the technology and semiconductor setups to keep an eye on and prepare for the week ahead.
Stay Focused!
Get a mid-week update from Chandler as the markets hit yet another all-time high. With Powell speaking tomorrow and the markets racing higher, what can we expect next?
The markets have been running up, and as we’ve been sitting at all-time highs (ATH) it’s finally time for a pullback. Any time we approach the 2 to 3 average true range (ATR) Keltner Channel band, take this as a sign to pump the brakes. There are still opportunities to enter long positions, but be very timely and methodical around this high territory. Understand we’re approaching levels of resistance, and the markets need a healthy pullback.
While there are times that we can run through this 3 ATR level, we want to focus on moves that provide consistency that we can build a reliable trading business around. Be patient, and attack the market day-by-day until we have an efficient reset. Check out the video above for a detailed view of how to prepare for this rotation with confidence.
Stay Focused!
With a largely anticipated earnings week coming up we are mainly looking at market sectors that affect the Dow Jones Industrial Average (YM). Pay attention to the rotation that could potentially happen as large banks like Wells Fargo and Goldman Sachs kick off the earnings week (and also the potential rotation after their earnings report). Keep a side eye on the Taiwan Semiconductor Manufacturing Company (TSMC) to see if there is any additional impact on the chip sector affecting the Dow Jones. While technology could continue higher we should see some rotation, depending on how earnings go, which should send the YM higher. Overall, be ready for earnings, Federal Reserve news, and potential rotation!
Here is our Focused List:
GOOGL – If breaks all-time high (ATH) can work its way toward 2,580. Relatively strong for technology
ROKU – Nice bounce off the daily mean. Watching a squeeze and push toward 445 to 463
SNOW – Firing daily squeeze. Watching 1-hour squeeze to fire and continue through 272 to 280
NVDA – Perfect bounce off daily Ichimoku Cloud. See if it can carry momentum toward ATH. All eyes on stock split next week
Stay Focused!
With the markets still extended, now is the time to scale down in position sizing, while still focusing strictly on the cleanest setups (in the strongest sectors) of the market.
While technology is the clear leader at this point, the extended charts of AMZN, MSFT, and others in the technological sector do not offer attractive entries at these levels.
The semiconductors, however, do look like attractive entries here. SMH has our favorite combo: a weekly and daily squeeze, both of which have the bullish structure we’re looking for in this market.
Over the next handful of weeks, we’ll be scoping out opportunities in the semiconductor space in setups like AMD, TSM, and others. Check out the video below to get a full rundown of our trading plan for next week.
Stay Focused!
Happy Friday, traders!
Another week in the books, and we’re continuing to see the same theme we’ve seen over the last month: crazy bullish and crazy extended. The markets continued their wild grind higher with another push into new all-time highs (ATH), with no signs of slowing down.
This week, we nailed a great trade on AMZN, as we came into the week with a 4-hour squeeze firing off the 8 exponential moving average (EMA). We entered on Tuesday morning after the opening bell and closed out the trade quickly, as we bought back the put credit spread yesterday for 70% of the max profit ($7,400). This is a smaller position size than usual, but we are happy to take advantage of opportunities like this in an extended market.
While we would love to see a healthy pullback before getting aggressive with larger position sizes on our long trades, there’s no guarantee we will be gifted one. What we can do for now is pick our spots wisely and simultaneously decrease position sizing.
As we optimistically wait for a reversion, we’ll be watching a few weekly squeezes next week in names like SMH, AMD, and SHOP. These all have a very bullish structure that fit our criteria perfectly. If the bullish party continues, these are the kinds of setups (as always) that we’ll be focusing on. In this Sunday’s newsletter, we’ll break these setups down in more detail and cover our game plan moving forward.
Enjoy the weekend and Stay Focused!
The market is ripping to all time highs with exhaustion levels starting to kick in. Be prepared for a potential reversion to the mean and understand how to trade the market differently during signs of upside technical exhaustion. Ask yourself, are we seeing true selling or true rotation?