Uncategorized

When a strong stock fires a squeeze to the upside there is typically the potential for five to eight bars of momentum. This means when a weekly squeeze fires long there is the potential for five  to eight  weeks of momentum, while a daily squeeze has the potential for five to eight days of momentum.

Weekly squeezes are one of the most powerful setups a stock can form as the energy building up inside the squeeze can often lead to weeks, if not months, of continuous momentum. This giant “wave” of momentum makes for an ideal time to build long positions either before or after the squeeze fires.

Setups based off lower time frames often have a stronger likelihood of firing long when there is a weekly squeeze releasing significant energy in the background. Daily squeezes in particular are one of the best times to build a position in an attempt to catch the continuation of the weekly squeeze power. A squeeze on the daily chart is often the moment in time when a stock is gearing up to make a bigger than expected move. Once a weekly squeeze has fired I am looking for a daily squeeze at the 21 exponential moving average (EMA) to start building my position.

To take things a step further, 4-hour squeezes are the moment in time for a strong move inside of the daily squeeze. When a bullish 4-hour squeeze fires to the upside inside of a daily squeeze, it can often cause the bigger time frame to fire its squeeze as well. Entries in a 4-hour squeeze allow us to build our positions during the quiet chop as opposed to chasing the stock once it begins to run higher.

What we are looking for here is the “domino effect” of energy being released on multiple time frames. Even in a volatile market NFLX proved to be a textbook example of a bullish triple-squeeze over the last couple of weeks. This made for a great trade in the Compounding Growth Mastery. If you are new to the squeeze, begin to approach your prep with this “top down” approach, looking for squeezes on larger time frames to provide the momentum needed for squeezes on lower time frames to get moving!

At the moment, TSLA is another example of a triple-squeeze with squeezes on the weekly, daily, and 4-hour time frames. This is one we’ll be keeping a close eye on into next week, especially with earnings around the corner. We were able to buy back our put credit spreads on the stock this week for a profit, but we think there is more gas left in the tank. Don’t forget to join us for pre-market prep on Monday morning on the Focused Trades YouTube channel as we’ll take a look at TSLA, the indexes, and much more!

Stay Focused!

After a volatile and fun market the last few days let’s see what the rest of the week has to offer.

One thing to note is that we have the nonfarm payrolls (NFP) job report on Friday morning, which could upset this market.

After a big drop from the S&P 500 (ES), the market held, chopped, and finally popped through resistance to the daily mean at $4,389. This is an important reminder that every pullback is just that — a break from the market’s bullish run higher. 

Let’s review compasses in the market, like volatility (VIX), that we’ll be watching as a gauge for the market’s direction, as well as identify key levels on TSLA, ROKU, and other stocks on our focused list. 

Stay Focused!

The S&P 500 (ES) closed below the daily Ichimoku Cloud on Monday, shifting market sentiment. We’ll be continuing our theme of “if this, then that” and using the daily Ichimoku Cloud as a compass. If price is above the Cloud, then we are very bullish. However, we’re already slightly bullish for this vulnerable market as the S&P 500 closed at lows on Friday below the daily Ichimoku Cloud. With this downside trend we’ll be focusing on higher lows to make our trades.

Here is our focused list:

GOOGL — On Monday GOOGL hit the bottom of the daily Ichimoku Cloud and continued to trade below the 50-day simple moving average (SMA). Use this as a compass to the downside. GOOGL dumped below the $2,666 level near $2,600 but managed to close above it. If GOOGL holds this $2,666 level watch for a move up to $2,743. If it drops toward $2,600, it could drag technology lower and potentially free fall to $2,500.

MRNA — Much needed pullback to the weekly mean. Broke out of its wedge and closed on Monday below the daily Ichimoku Cloud. If MRNA holds the weekly mean at $330, look for it to break $340, then $350, and up to $375. If it drops below $310 look for $292 as the next big level.

NVDA — Leaning bearish due to its daily squeeze firing to the downside and after it broke the daily Ichimoku Cloud on Monday. Arm acquisition decision on October 10 will be a big catalyst. Good news can make it explode, bad news could lead to downside pressure. Can NVDA work back up to $200 and get rejected or will it drop to the $194 to $188 range? If it can hold the weekly mean at $197 and work back toward $199, look to take NVDA to the upside to point of control (POC) at $207.

TSLA — Reported strong delivery numbers over the weekend for a big gap up toward $800 and then headed down toward the $780 level on Monday. If TSLA maintains the zone between $780 and $760 we’ll stay more bullish. If it drops below POC at $760, TSLA could add to the market dump and drag the SPX lower.

Stay Focused!

We’re seeing a change from our typical “buy the dip” market where we look to buy the dip at the 21 exponential moving average (EMA) and take it to the upside. With bearish momentum, we could see a transition to a “short the rally” market where we short the market at the 21 EMA for a flush to about -2 to -3 average true range (ATR) extensions and look for a bounce back to the 21 EMA to repeat the process.

In today’s video, we’ll review which spots to look for to take our short positions. It’s important to note which setups we want to avoid and which setups are maintaining their bullish structure in volatile market conditions to take long, like NFLX. Be patient and disciplined in this market and focus on the path of least resistance.

Stay Focused!

The markets were met with strong selling pressure this week and the daily charts of the major indexes and sectors lost bullish structure. To us, a loss of bullish structure takes place with a series of closes under the daily 21 exponential moving average (EMA), a negative histogram, red 10x bars, and a lack of positively stacked EMAs.

Until the market has two to three solid closes above the 21 EMA, the path of least resistance is most likely to the downside. The goal is to continue playing the ebbs and flows of the market but in the opposite direction of what we have been doing for the last handful of months. This is what we refer to as a “short-the-rally” market environment. 

When going short, we want to pick our spots just as wisely as we do when we’re going long. To profitably trade a downside trending market we want to avoid shorting “in the hole.” In other words, we want to avoid shorting at -2 to -3 average true range (ATR) extensions. Instead, we want to short the rejections of the bounce into the 21 EMA and aim to take profits on the flush into -2 to -3 ATR (chart below).

With a decent bounce into the close on Friday, we’ll have to see if the markets can gain support into Monday for a move back to the 21 EMA early next week. If the S&P 500 (ES) gets rejected there this could be where we get our opportunity for a better short.

In Sunday’s video, we’ll dive a bit more into the shift of momentum we’ve seen over the last few weeks, along with a few “gems” that are still setting up with bullish structures in the midst of a volatile market. We were able to take profits on both our HD and NFLX swings this week in the Compounding Growth Mastery. Have a restful weekend and we’re looking forward to tackling whatever the market throws our way next week. 

Talk to you on Sunday!

Stay Focused!

The market sits at a critical point of volatility that will affect not only just the rest of the week but also into the fourth quarter starting in October. On Thursday, the market dealt with quarterly options expiration which gave the market a reason to drop lower.

We’re continuing to observe the daily Ichimoku Cloud as a guide for the trend and for the first time this year the S&P 500 (ES) dropped to the bottom of the Cloud. This threatens a potential bearish trend for the first time this year. 

Let’s see what the market decides, but be prepared for some potential downside. Use the volatility index (VIX) as an additional compass for price movement across the market. 

Watch the video above for a breakdown of key levels we’re watching on the major indexes and the current setups on our focused list like GOOGL, MRNA, SQ, and NFLX. We’ll talk to you in Q4! 

Stay Focused!

We’re continuing our conversation on the daily Ichimoku Cloud as the S&P 500 (ES) experienced another drop, retested the level, and set up for another dip-buy opportunity. We’re focusing on the range from $4,425 to $4,483 to dictate whether we see another reversal. We approached this range on Monday, but sellers brought the ES right back down. 

There are three scenarios we can expect to happen… 

We either:

• Chop and squeeze in consolidation
• Drop and revisit the daily Ichimoku Cloud and lows from last week
• Hold $4,425, squeeze higher, and break $4,483

Here is our focused list:

GOOGL — Had a selloff to the 50 simple moving average (SMA) that led to a dip-buy last week and has since exploded higher. Currently squeezing on the daily mean, so keep an eye on the range from point of control (POC) at $2,774 to $2,800. Let’s see if GOOGL chops or breaks higher and pushes it from $2,800 to $2,848 and potentially to all-time highs at $2,900.

ROKU — Continues to bottom out through $350 and $310. ROKU fell on Monday and had a slight pop at the close. Look for a push higher to POC at $322. If it holds POC, look for a push to the upside at the $338 to $341 zone. Use $334 as a strong key level. 

AMD — Finally broke $99 and held, then set up a wedge and exploded through it on Monday. Looking for it to rise to the $109 to $112 range. Experienced a healthy pullback to the 50 SMA and is starting to ramp up. A retest of $107 could offer a good dip-buy opportunity to take it up to $109 and $112. 

TSLA — Closed above the consolidation zone at $764 on Friday. Broke out of $780 and continued to push higher toward $800 on Monday. Keep an eye out for a dip-buy opportunity up to $815 to $825. First see if TSLA can hold $780 for a dip-buy. 

MRNA — Dropped to the bottom of the range at $406 on Monday toward the daily Ichimoku Cloud and the 50 SMA. This could be a good dip-buy if met with support or it could break the $406 level and drop lower. Will MRNA hold the daily Ichimoku Cloud at $406 and pop up to the daily mean at $420 or POC at $429 for a good dip-buy? If we break $406, MRNA could drop down to the 50 SMA at $395.

Stay Focused!

Last week the markets flushed after experiencing some selling pressure and volatility. Heading into a fresh week, we’re approaching the markets cautiously bullish. 

The S&P 500 (ES) dipped to the weekly 21 exponential moving average (EMA) for the first time since last October, which we can expect to see in a very bullish weekly uptrend.

Watch the video above for a look at the major indices and key setups we’re focusing on heading into the new month of October. We’re keeping an eye on the setups that have held their structure regardless of the flush like TSLA, ZS, and NFLX.

Stay Focused!

Happy Friday, traders! With the markets extended to the upside over the last few weeks, we offered the advice to prepare ourselves for a sudden selloff. Sure enough, the selling pressure finally hit this week as the markets flushed to the downside.

Despite the flush the markets bounced considerably into the end of the week, setting the tone for what should be a very interesting month of October. It continues to be daily charts versus weekly charts here, a classic battle throughout the course of any uptrend.

Both the S&P 500 (SPY) and Nasdaq (QQQ) held bullish structure perfectly this week (charts below), bouncing with a vengeance off their weekly 21 exponential moving averages (EMA). Holding weekly structure implies that the selling pressure may dissipate here, but the structure of the daily charts implies the potential for a lot of back-and-forth chop.

We are long some good-looking setups here but are moving forward with caution. Should the indexes fail to get back above their daily 21EMA, there is the potential for some nasty chop or another flush. If instead the markets can simply hold firm here, we’ll be looking for the setups that maintained their bullish structure in the face of volatility to continue moving higher.

We’ll cover a few of the setups in detail in Sunday’s video, but names like TSLA, ZS, NFLX, and a few others are catching our attention. TSLA is a perfect example of a stock that held structure perfectly while the rest of the market declined. Not always, but often these are the first stocks to rip higher once the market stabilizes. All week long TSLA held strong inside its 4 hour squeeze, which is on the verge of firing to the upside into Friday’s close. 

The put credit spreads we sold in the Compounding Growth Mastery on Thursday are already shaping up nicely and we’ll look for continuation into $780 to $790 next week. 

With the daily charts of the indexes “leaving a bit to be desired”, patience, discipline, and a strict focus will be very important over the next few weeks. Keep an eye on your inbox for Sunday’s video, where we will dive into setups we think could offer opportunity in the weeks to come.

Stay Focused!

Keep a tight focus on the daily Ichimoku Cloud. Every time this year, when we’ve seen the S&P 500 (ES) drop below the 50 simple moving average (SMA) it’s continued to bleed down to the daily Ichimoku Cloud for a nice dip buy opportunity. 

On Thursday, we finally saw a strong pop off of the daily Ichimoku Cloud back up to where the move originally started.

This year we’ve seen steady explosions lasting about 1 to 2 weeks off of the daily Ichimoku Cloud. Let’s see if we rip higher on Friday past the 50 SMA, daily mean, and the $4,480 key level to a new all-time high or roll back down to the daily cloud again. 

Our focused list has ROKU pushing to Point Of Control at $338, MRNA showing an uptrend, FB down on the week, and AMD waiting for a wedge breakout. Watch the video above for a full rundown on the major indices and key levels we’re watching next for our focused list.

Stay Focused!