The market is currently overbought. The major things we want to look for are signs of exhaustion.
Once the market hits 2+ average true range (ATR) moves above the daily 21 exponential moving average, it could still push toward 3+, 4+, or 5+ ATR. The major signs of exhaustion are when the lower timeframes begin to switch from bullish to neutral.
At this point, the S&P 500 (/ES) is trading above the daily 21 EMA. We want to focus on the structure below the surface. We know the market is extended, but how far will it go?
The S&P 500 (/ES) has a 2-hour squeeze with Big 3 buy signals. Trend, structure, and momentum on the 2-hour, 1-hour, and 30-min time frames show that the path of least resistance is still to the upside.
We’d love to see a flush, potentially to $4,150, to get better entries for swing trades. For now we’re looking to see how far the market can go. We could see a push toward the 200 simple moving average (SMA) and make a run to $4,300.
The market is extended, but it’s not showing signs of slowing down just yet.
Get Taylor’s trade alerts sent right to your phone with the Compounding Growth Mastery! We’d love to have you join for a trial. In this Sunday’s watchlist video, we’ll review trades we’re looking to buy on a dip including AAPL, TSLA, and NVDA.
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