The main event this week is Options Expiration (OPEX) happening on Friday at the close.
Into the events of this week’s liquidity, the S&P 500 (/ES) got back to structure and created a double top. The /ES then dropped to the top of the zone at $3,720 and popped back to the low of the year at $3,807.
On the S&P 500 (/ES), we’re focusing on two potential outcomes. The first option is it fails at $3,807 and drops to last month’s Point of Control (POC) at $3,774. The other option is /ES could break through $3,807 to the current POC at $3,828 and hit the daily 21 exponential moving average (EMA) at $3,853.
We are observing the structure on the Nasdaq (/NQ) to see if it breaks through it at $11,804. The next target is the daily 21 EMA at $11,860. If the /NQ breaks through, it could reach theConsumer Price Index (CPI) levels at $11,978.
In the video above, we’ll break down how the major events this week impacted the market, define key zones, and observe the structure of the /ES. We’ll also review our focused list setups on NVDA, SHOP, and AMD.
There are a few catalysts heading into the short week.
The Consumer Price Index (CPI) comes out on Wednesday at 8:30 a.m. Eastern, followed by the Options Expiration (OPEX) on Friday at the close.
Pay attention to TSMC earnings on Thursday morning to watch the semiconductor sector for potential setups. On Friday, GOOGL will have its 20 to 1 stock split that will take effect on Monday.
The S&P 500 (/ES) dipped through its support structure last week and rallied to where it previously failed at $3,900. This is where we want to look for a potential double top.
With OPEX this week, we want to focus on the /ES Point of Control (POC) below $3,828 and the daily 21 exponential moving average (EMA) at $3,875. If /ES heads toward $3,828 (POC) and pops, we want to see a rip out of the structure to $3,966. If /ES breaks $3,828 (POC), our next target is $3,741.
Similar to /ES, the Nasdaq (/NQ) could have a double top and reach $11,804 (POC). Look for /NQ to drop to its structure at $11,604. If /NQ pops, it needs to get through $12,207 to hit our next target, the zone at $12,609.
Here is our focused list:
NVDA — We want to continue to look to short its structure at $152 to our next target of $146. Then look for NVDA to fill the previous gap at $149. If NVDA holds $152 and breaks through, look for a push toward $168.
SHOP — If SHOP drops this week and nears $29, be mindful of a pop toward our key zone at $34, the daily 21 EMA. If SHOP doesn’t move lower, look for a pop toward $34 at the daily mean and short at $30.
I’ll be live in the Simpler Day Trading room from Monday to Friday this week to cover the market. Tune in to trade these setups with me live and look for more potential opportunities in the market.
Last week, the bulls battled it out with the bears and made progress.
The bulls pushed the S&P 500 (SPY) and Nasdaq (QQQ) above their daily means, the daily 21 exponential moving average (EMA).
While we’re still in a down-trending market, the question becomes if the bulls continue this progress.
This week, we’re looking for bullish opportunities that can be kept short-lived. Our focus will be looking for setups with lower time frame squeezes and Big 3 buy signals while trading above their daily 21 EMA.
In the video above, we’ll review how to apply the Big 3 buy signal to our trading this week and discuss setups that “fit the bill” of our checklist, like ZM and TSLA.
Happy Friday, traders! The bulls made decent progress this week. Both the SPY and QQQ traded above their daily 21 exponential moving averages (EMAs).
The big question for next week is whether or not the bulls can keep the progress they’ve made and continue to grind the markets higher.
The market isn’t suddenly bullish just because the indices are above their daily mean. However, it is a step in the right direction should July see the markets rallying higher.
If the bulls have control over the next few weeks, we’ll focus on opportunities in our favorite setup: squeezes with the Big 3 buy signals.
Squeeze & Big 3 Buy Signals
The power of the squeeze is it can lead to the “release of energy” needed to trigger an explosive move—first compression, then expansion. The Big 3 signals help us determine which direction the squeeze is more likely to fire.
This week, we ran our scans daily, looking for these setups. We were able to find opportunities using this criterion. One of the better examples from the week was the 30-minute squeeze in Zoom (ZM), which we took profits on Friday morning. This short-lived trade was good for a 50% return on our calls.
ZM 30-min Chart
For these lower time frame trades, we’re looking for stocks trading above their daily 21 EMA with squeezes and Big 3 buy signals on the lower time frames. ZM had the “squeeze and signal” combo on the 30-minute and 60-minute time frames.
Remember, these squeezes are the moment in time when a stock is gearing up for a move. The Big 3 buy signals tell us the odds favor the squeezes firing to the upside.
Short-Lived Bullish Opportunities
As you are building your bullish watchlist this weekend, focus on finding stocks that fit this criterion. A stock above the daily 21 EMA with lower time frame squeezes can offer the short-lived bullish opportunities we’re looking for in this market. For now, the days of taking swing trades based on daily charts is in the past. We’re forced to focus on these lower time frames to uncover the opportunity.
Keep an eye on your inbox for this Sunday’s watchlist video, where we’ll cover a handful of setups similar to the one we traded in ZM this week.
We are ending the week with a big catalyst, the Nonfarm Payrolls (NFP) report on Friday at 8:30 a.m. Eastern.
We started the short week with the Federal Open Market Committee (FOMC).
The S&P 500 (/ES) created a new low and ran back toward the 21 exponential moving average (EMA) on the Fed event. On Thursday, the /ES had a cover pop leading us to our zone at $3,900.
The next few days, the market will have to work around the trendline at $3,930 and $3,950 and make a decision.
We’ll continue to look for the /ES to potentially double top and fail at $3,930. A potential rollover could lead us to our first target, the daily 21 EMA, and the second target, Point of Control (POC) at $3,828.
We could also see a continued cover pop breaking structure above at $3,930 and head toward $3,976.
In the video above, we’ll break down how the FOMC impacted the market, define key zones in the Volatility Index (VIX), break down the structure of the S&P 500 (/ES) and technology index (/NQ), and review our focused list setups on NVDA and GOOGL.
Heading into the short week we have a few catalysts.
The Federal Open Market Committee(FOMC) event is happening on Wednesday at 2:00 pm Eastern, followed by a Nonfarm Payroll Job report on Friday.
Be mindful of the FED with the market being under the current structure.
/ES ended last week at around $3825, If we migrate towards $3855 and struggle we could reset and head back down to June’s Point of Control (POC) at $3774. Overall bearish so be patient being bullish, if the market does rally look for it to reach its previous structure around $3900 to $3930.
On Friday /NQ ended the week on $11605 (POC) look for it to potentially retest liquidity at $11804 or if we dont pop we could fail and roll over to the low of the year at $11068.
Here is our focused list:
/NVDA — Broke below our low of the year $152.2 and is under structure, with it trending down look out for a reset at $152 we want to get ready to short to the gap fill of $142 to 140, if we break the gap look out for our major target of $134.
/AMD — Under major levels and heading towards low of year $72.5, looking for potential pop playing it long towards $79 and potentially reload some shorts to head back down towards $72.5, if it breaks $72.5 look for $67.
I’ll be live in the Simpler Day Trading room from Monday to Friday this week to cover the market. Tune in to trade these setups with me live and look for more potential opportunities in the market.
The S&P 500 (/ES) is in a downtrend, and the weekly squeeze is firing short. The /ES is trading at -2 average true ranges (ATR) below the 21 exponential moving average (EMA).
Now the question is… will the market roll over and create a new low?
The other option is a reversion to the daily mean, or the 21 EMA. Think of this big rally as similar to the pullbacks we see in bearish trends. As swing traders, rallies to the weekly 21 EMA are our best opportunities to get short in bearish markets.
In the video above, we’ll review the structure of the major indexes and provide other tickers to observe to get more clarity on the market.
Heading into July, the question on all traders’ minds is whether or not the markets continue to roll over from here.
We expect more downside, but is there potential for a “bear market rally” before the next big puke?
For the markets to have any chance of rallying in a sustainable fashion in July, a few things will have to come together. Add these to your notes, and watch them closely over the next few weeks.
SPY Weekly Chart:
There are a few important observations to make about the weekly chart of the S&P 500 (SPY).
For starters, we must respect that the weekly squeeze is firing to the downside. The rule-of-thumb is that once a squeeze fires on any time frame, we’re typically looking for 8 to 10+ bars of momentum in that direction. Given that this is a weekly squeeze firing short, this signal could have enough gas in the tank for another 4 to 6 weeks of steady downside.
While this squeeze will likely take us lower (eventually), we must also recognize that the weekly chart is technically oversold, trading at the -2 average true range (ATR) extension. More often than not, once the market drops to -2 ATR under the weekly 21 exponential moving average (EMA), there is a growing probability of the market reverting to the mean (rallying to the weekly 21 EMA).
We have a squeeze that could take us much lower, yet the market is a bit oversold. What can we watch from here for confirmation of the next move?
DXY: US Dollar
To keep things simple, the markets tend to trade lower if the dollar trades higher.
The DXY chart looks incredibly bullish with our Big 3 buy signals across multiple timeframes. The structure and signals suggest this wants to trade higher (for now). If it does, we can expect the markets to grind lower. For the market to have a good chance of a real rally, we’ll need to see DXY under $104, which should cancel out the current buy signals.
DXY Daily Chart
HYG: “Junk Bonds”
So long as HYG trades lower, we can expect the bears to remain in control of the market.
At the moment, we have multiple timeframes printing our Big 3 sell signal on HYG. This suggests HYG wants to move into lower prices. For a bear market rally in the SPY and QQQ to unfold, we’ll need to see HYG trading above its daily 21 EMA around $75+.
HYG Daily Chart
These are simple yet important things to keep a very close eye on as July unfolds.
For now, our game plan is to take whatever the market has to offer, long or short, with a focus on our Big 3 signals. In this weekend’s video, we’ll take a look at HYG + DXY and a few other setups through the lens of the Big 3 indicator.
We are excited to announce that all members of the Compounding Growth Mastery are granted early access to purchase the Big 3 Buy and Sell signals. We look forward to using the Big 3 indicators in our next live trading session together.
Enjoy your long weekend, be safe, and it’s back to work next week!
The end of the second quarter is here. We want to focus on the rebalancing that can happen. As discussed earlier in the week, a nice roadmap has unfolded for us.
We started the week with a double top. The S&P 500 (/ES) broke under our major zone, leading us back below the mean at $3,880. This led the /ES toward the structure from our prior low of the year at $3,807.50.
There was consolidation heading into Thursday’s session. The /ES had a gap down after-hours, bringing the /ES back to point of control (POC) at $3,774. The /ES popped back to the low of the year at $3,855.
Thursday, June 30th marks the last day of the quarter and also rebalancing. This could be part of the reason for the /ES pop on Thursday.
The /ES is under the daily 21 exponential moving average (EMA) and a big structure. If the market pops after rebalancing but doesn’t break above this structure, there’s a lot of work left to do.
If the S&P 500 (/ES) struggles to get above $3,800, look for it to head back to POC, the low of the year, and our next key level of $3,720. If the /ES holds $3,800, see if it can hit the top of our zone at $3,855.
We’ll also continue to observe structure for a potential double top.
In the video above, we’ll break down where the market could head after rebalancing, define key zones in the Volatility Index (VIX), break down the structure of the S&P 500 (/ES), and review our focused list setups on NVDA and AAPL.
The market made the perfect reset on Monday for the chance to make a big move next.
The S&P 500 (/ES) hit the low of the year at $3,639 and bottomed. On Monday, we saw a cover pop to the daily 21 exponential moving average (EMA).
On Tuesday morning, SHOP will have their 10-1 stock split, which we’ll review in our focused list in the video above.
On Wednesday, June 29 at 9:00 a.m. Eastern, Federal Reserve Chairman Jerome Powell will speak on the Economic Policy Panel Discussion at the ECB Forum on Central Banking.
Keep in mind we are heading toward the end of June, which also means we’re approaching quarter-end rebalancing. Next week will also be a shortened holiday week, as the market will be closed on Monday, July 4th.
On Monday, /ES ended the day at the daily mean (21 EMA) at $3,900. If /ES holds $3,900 and breaks through the high of the week at $3,948, expect the market to move toward its upper zone and trendline structure (as discussed in the video above).
If /ES breaks $3,900, look for a drop to the key zone at $3,855. After that, there’s potential to hit its prior low of the year at $3,800.
Here is our focused list:
NVDA — Broke below its 21 EMA at $172 on Monday. If NVDA can’t break above $170, it could drop to the support structure below near $164 to $163 down to point of control (POC) at $158. If NVDA reverses along with the rest of the market, see if it can hold its 21 EMA, break $174, and fill the gap from $176 to $180.
SHOP — Practice patience after the stock split Tuesday morning. See if SHOP can move toward $383 and fail for a short opportunity to $355. If SHOP drops to $355 first, then look for it to bounce to $383. We’ll need SHOP to get through its stock split before heading to its next inflection point.
AMZN — Trading near its daily 21 EMA at $113. If AMZN holds its daily mean, look for it to work its way to the trendline structure above to its 50 simple moving average (SMA) at $120. If AMZN does not hold $113, look for a drop to $109 and $107.
I’ll be live in the Simpler Day Trading room from Wednesday to Friday this week to cover the market open. Tune in to trade these setups with me live and look for more potential opportunities in the market.
