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While there are a handful of great looking trends and squeezes setting up in the market, it would be foolish of us to ignore that the indexes and almost every major sector Exchange-Traded Funds (ETF) are extended here. When it comes to building swing positions in an extended market, here are a few of our favorite tips.

1. Find a trend, find a squeeze. 

In an overall extended market we become very strict as to the setups we’ll trade. Our goal is to find setups that can continue their upward trajectory over the course of weeks or months even in the event the markets pull back a bit. Often uptrends and squeezes on bigger time frames, like the weekly and 3-day charts, offer the trend and structure needed to survive a short-term selloff.

 2. Give your trades plenty of time till expiration.

When the indexes are extended we will look for weekly, 3-day, and daily squeezes to begin scaling in to our max position size. We like to give our swings five to eight or more weeks until expiration as this allows us to comfortably sit through any “short-term” downside while still being positioned for the bigger picture move.

3. Premium decay is your friend.

Buying calls on trending stocks works great when the market is rallying but can quickly turn troublesome in the event of a pullback. When the market is extended we opt to sell credit spreads on our setups as they are much more forgiving than long options. When the market is closer to the daily 21 exponential moving average (EMA) we are more open minded to getting long calls/long debit spreads.

 These are just a few simple tips and adjustments we like to make in our trading when the indexes are trading at 3+ average true ranges (ATR). When the market is this “cooked” there is increasing potential for a short-term pullback, one which may only last a few days. Our goal is to get positioned for the continuation of bigger picture trends while at the same time being able to hold through short lived downside.

 AMZN with its monthly, weekly, 3-day, and daily squeezes is a prime candidate for this kind of swing trading right now, and we are looking to slowly scale in to January expiration swings. 

 

 

Our game plan for GOOGL with its solid 3-day squeeze is exactly the same, and we have already started building positions in both AAPL and NFLX in the Compounding Growth Mastery with January expiration put credit spreads.

 

 

 

In Sunday’s premium video, we’ll take a look at the exact spreads we are looking to initiate on these setups, our current open positions, along with a look at this week’s Focus Scans results!

Stay Focused!

 

 

The biggest focus point this week is on the 4-hour squeeze printing on the S&P 500 (ES), as the ES traded lower toward the 4-hour Ichimoku Cloud and Point of Control (POC) near $4,619. For the rest of the week we’ll watch to see if the ES can push up to the Ichimoku Cloud top at $4,673 or drop through the Ichimoku Cloud bottom to POC. 

We can use the hourly squeeze to determine which direction we can expect the market to move next. 

The Volatility Index (VIX) popped from 18 to 20 on Wednesday and retreated to 18 on Thursday. 

If VIX breaks through 18, we can expect a pullback and the squeeze to fire to the downside. 

If VIX stays below 18, the market will likely fire the squeeze to the upside.

Remember to focus on what is in front of you and react to the market. Watch the video above for squeeze setups we’re watching on GOOGL, NVDA, and BNTX.

Stay Focused!

 

The market is extended ever since its reversal, rallying off the lows for about 37 days now with the S&P 500 (ES) up about 400+ points. The S&P 500 is trading above the 3+ average true range (ATR) which is the second time we’ve seen these types of exhaustion levels this year.

Be patient with the market and look for the squeezes to give you some direction. While we would love to take advantage of a pullback, the market has continued to rally higher so we need to continue to react according to what the market gives. Avoid having a strong bias of one direction or another. 

Here is our focused list:

GOOGL — Strong push to all-time highs (ATH) last week and continued on Monday. Squeeze starting to form, looking for it to pop. Use the 1-hour Ichimoku Cloud as an indicator to watch along with the $2,973 zone. Look for the squeeze to pop to the upside and for GOOGL to break $3,000 up to $3,050.

NVDA — Very extended, trading above 3+ ATR at around 5+ ATR, while point of control (POC) increased to $308. The Artificial Intelligence conference on Tuesday could be a catalyst for either direction. The 2-hour squeeze and hourly squeeze are forming, so we could see a short-term breakout through $314 as long as NVDA continues squeezing tight.

SHOP — Had a strong rally last week but sold off at the end of day on Monday. The weekly squeeze is showing strong momentum and compression which could lead to a move higher. Be patient to see if SHOP pulls back to $1,500 for a dip-buy opportunity.

QCOM — Huge breakout to ATH on Friday and chopped near the highs on Monday. If QCOM keeps trading below the highs with a squeeze, keep an eye out for a breakout to $170. 

Stay Focused!

 

 

At this point the market is very extended with an overwhelmingly bullish trend. 

For the first time since September, 2020, the S&P 500 (ES) is trading above the 3+ average true range (ATR) on a daily chart. While we’re expecting this bullish trend to continue into the new year, expect shorter-term pullbacks and use them as buying opportunities.

For our swing trades, we’re looking for longer-term expiration in December and into January 2022. Ideally we’re looking for positions in the strongest trends with squeezes on multiple time frames, the patience to pick our spots wisely, and our setups to ride into early 2022.

Watch the video above for our watchlist of setups that we’ll be looking to take heading into the end of this year.

Stay Focused!

 

Though the markets are (very) extended to the upside, our thought process is that this uptrend will continue into December and early 2022.

While we know there will likely be a handful of pullbacks over the next three to four months, we’ll view each as buying opportunities in the strongest trends so long as the market maintains its bullish structure.

We’re building positions with patience here, and our number one goal is to pick our spots wisely.

We are dying to build a position in GOOGL as its 3-day squeeze looks poised for some action, but the stock is a bit too extended to offer a great entry here.

On the other hand, NFLX is the first trend we’ve started to “nibble on” as it pulled back to its daily 21 exponential moving average (EMA) on Friday. We are slowly scaling into positions with the understanding that we may take some short-term heat in the event the market does pull back.

 

 

We are completely fine taking any heat in the short-term and would look to continue scaling-in as we think these trends will result in higher prices over the next five to 10 weeks. 

Another setup we are looking to build a position in is AAPL, which has a weekly, 3-day, and 195-minute squeeze. Any dip to the 21 EMA is a buying opportunity in our opinion.

 

 

We’ll be giving all our swing trades plenty of time to work here going out to December and January expiration. 

When we look at recent explosive moves like in TSLA, NFLX, and IWM, each of these moves were triggered by a weekly squeeze. When a squeeze fires we tend to get five to eight bars of momentum, meaning a weekly squeeze can produce five to eight weeks of momentum. 

Our goal at the moment is to build positions in some of these bigger squeezes to benefit in the months to come from the potential five- to eight-week burst to the upside. 

There are a few more setups that fit this bill that we’ll be covering in Sunday’s video, so be sure to keep an eye on your inbox for that!

Stay Focused!

 

 

The market is continuing its march higher and isn’t showing signs of slowing down.

Technology is the strongest sector leading the market, driving the bulls higher. With the bulls in control, the market is reaching a point of being extended. 

The S&P 500 (ES) is hitting 3+ average true range (ATR) from the daily mean for the second time this year, the first being in April. 

While we want to use our technicals to help capture the probability of moves, we should not rely solely on the theoretical. Although extended, the market could keep grinding higher and there isn’t any promise for a pullback.

Remember our “if this, then that” rule? Rather than having a strong bias, listen and react to triggers in the market to determine its next move. 

If the ES breaks $4,650 we could use this as a trigger to see it drop to $4,627 and potentially down to point of control (POC) at $4,620. Vice versa, if the ES breaches $4,674, it could run to the psychological level of $4,700.

Watch the video above for more trigger points and key setups like ABNB, QCOM, and GOOGL that we’ll be watching in the market.

Stay Focused!

 

 

We have an eventful week to start November with earnings releases and economic events that could lead to potential spikes in volatility. 

After big technology earnings last week, we’ll be shifting our focus to earnings from ROKU on Wednesday after the close, MRNA at the open on Thursday, and more names like SQ, ABNB, and COIN at the end of the week.

Practice patience around earnings and focus on playing the premium crush and market reaction after earnings are released.

Regarding the economic calendar, keep an eye on the ADP employment report on Wednesday and the FOMC statement followed by Federal Reserve Chairman Jerome Powell speaking at 2:30 p.m. Eastern that same day. Another potential market-moving catalyst is the nonfarm payroll report on Friday.

These economic events are often strong chances for volatility.

Here is our focused list:

UPST — Last week a wedge began setting up with a 2-hour squeeze. UPST pushed to the key level at $346.54 and closed underneath it on Monday. We are looking for a continued zone-to-zone. Let’s see if the wedge and squeeze will continue to fire and UPST pushes to the $357 to $363 area at point of control (POC). 

SHOP — After a strong breakout last week SHOP continued to rally on Monday. Now we are approaching tougher territory, where it could reach $1,600 but it might be a hard journey to get there. Watch to see if SHOP can hold $1,506, break $1,540, and then reach $1,588. 

NVDA — After a strong run to all-time highs, we’re looking to short NVDA. It finished near its all-time high at $259 on Monday. We would love to short at this high down to last month’s POC at $247. Use the 3-minute Ichimoku Cloud as an additional guide to indicate if NVDA will drop lower. 

I look forward to seeing those of you who signed up for the Max-Out Your Trade strategy class with pro and elite live-trading sessions the next two weeks. If you want to follow this strategy in real-time with me, register for the class here. 

Stay Focused!

 

Despite earnings misses from both AMZN and AAPL, two of the most important stocks in the market, nothing could stop the Nasdaq (QQQ) this week. The big question at this point is what will it take for this trend to end or at the very least pullback to the 21 exponential moving average (EMA). 

The combination of exhaustion of bullish momentum and sell signals can bring a roaring market to a screeching halt, and there are neither of those to be found on the indexes right now. While we are certainly due for a pullback, we are not looking to fight this trend and instead are looking for opportunities to catch continuation of this momentum.

 

 

One of our favorite trends here is GOOGL, which quickly rallied to a new all-time high (ATH) after earnings. Into today’s close, we built a long position in the 30-minute squeeze, and we’re looking for a move into $3000+ next week. The structure of the 30-minute squeeze fit all of the same criteria that we look for in a daily squeeze – with positively-stacked EMA’s, green 10x bars, and a positive histogram. 

 

 

The key with this market has been to look for these ‘moments in time’ but on lower time frames. While waiting for a retracement to the 21 EMA is a good game plan in a normal market, we are not in a normal market here. 

Until the party ends, we’ll be looking to pick our spots wisely in leaders like GOOGL in an attempt to catch the continuation of this crazy momentum. 

The squeeze is a versatile setup. You just have to know where to look! With that being said, be sure to join us for premarket prep Monday morning at 7:45am Central on the Focused Trades YouTube Channel, as we’ll be running scans for lower time frame squeezes together. 

Until then, enjoy your weekend and we look forward to getting back to work on Monday!

Stay Focused!

 

 

The market has presented some great opportunities with the earnings season still far from over. The S&P 500 (ES) is trading below Tuesday’s all-time high at $4,590 as the bulls continue their strong bounce back. 

While the market is extended, this doesn’t necessarily mean it will trade lower. As long as the ES holds $4,549, we expect the market to remain bullish. 

The ES is printing a tight 4-hour squeeze ahead of big tech earnings with AAPL and AMZN reporting. If the squeeze fires and the ES breaks all-time highs, we’ll anticipate a push toward $4,360. If not, expect a drop to $4,549 and down to Point of Control (POC) at $4,528. 

Avoid having a strong bias in one direction or another, and instead, watch and react to the market. 

Watch the video above to see which key levels and earnings reports we’re watching ahead of next week’s economic events. View how we use the Volatility Index (VIX) as a compass and approach potential setup opportunities like on SHOP, NVDA, and FB.

I’ll see those of you signed up for my Max-Out Your Trade strategy class this Saturday, October 30th. If you’re interested in signing up and getting access to the class recording, sign up here: https://bit.ly/3vR5O3o 

Stay Focused!