This week, Sam Shames, VP of Options at Simpler Trading, shares his macro review on the market for the week and key levels that must hold for the bulls.
Story of the Week
Bulls enter the week having held key levels on weekly closes: SPY $380 and QQQ $262
These remain the must-hold levels for bulls.
There are some advancements that have occurred beyond the Friday short squeeze… Dow now has weekly buy signals + structure… bonds are attempting to make a tradable bottom… Dollar has a bull trap pattern… bottom of the barrel assets like XLC and EEM are showing bottoming patterns… AAPL and TSLA and AMZN all triggered reversal patterns on Friday (must hold the lows to stay valid).
Knowing your index levels into the next few weeks/months will be critical.
You’ll notice that Sam refers to his proprietary premium indicators, the TrendOscillator Pro (TrendOsc) and HiLo Pro. For more information on Sam’s true momentum indicators and how to apply them to your trading, visit the link here or reach out to our support staff at [email protected].
Game Plan
The plan for the next week is straightforward.
It is the quintessential “if this, then that” dynamic.
IF the SPY holds $385, THEN we look for a battle higher at $390.
IF the SPY holds $390, THEN we look for a battle higher at $400.
IF the SPY loses $380 on weekly close, THEN we look for a max short situation.
From here on out the bulls must continue to press the short squeeze they started on Friday… it doesn’t have to be straight up, but they have to hold key levels.
The $PCALL remains high and that can act as the fuse for a continued short squeeze… $PCALL alone is not enough, but as long as price continues to inch higher and hold pullbacks that will encourage the shorts to look for the exits.
The internals are vibing with the bull case as well with VIX and VVIX showing bearish patterns, especially VVIX with a new low.
The internal breadth readings also held key levels for the first time in a long time, so the breadth implies rallies should be relatively broad based and could be led by laggards like tech and semiconductors.
The Dollar potentially breaking down further and bonds holding also help bulls.
This is the best chance the bulls have to run for a while, know your levels and your plan on what to do above and below those key SPY prints.
Cheers,
Sam Shames
