Stocks keep bouncing off the daily Ichimoku Cloud and into new all-time highs (ATH). This has become a pattern for the market lately, which has thankfully kept its bullish structure.
The possible moves we discussed in Tuesday’s newsletter unfolded nicely, so we will continue to keep an eye on the same levels and indicators, namely the daily Cloud and point of control (POC). Check out the video above for a deeper dive.
Stay Focused!
We may have a pivotal week ahead of us, so now is a good time to pay attention to a few things that will give us a roadmap to our next moves. The daily Ichimoku Cloud on the ES has continued to serve as a good signal to buy the dip while point of control (POC) and the 50-day simple moving average are two other good indicators to keep in mind as we approach our trades this week.
Here is our Focus List:
NVDA – Let it pull back and settle near the mean. We’re stalking some intraday squeezes for a continuation, but it needs a little break before it gets there.
FB – Setting up a daily squeeze under the all-time high (ATH). Waiting on tech to make a move.
GOOGL – Similar to FB, currently sitting right under the ATH and waiting on tech. Be patient!
ROKU – Firing on the daily squeeze and above the daily Ichimoku Cloud. If it holds at 380, then it has a chance to hit our goal of 400.
SNOW – Watching the daily squeeze. Also watch for rebalance buying to break through 256 and move toward 280.
ETSY – Keeping an eye on a daily wedge and a daily squeeze. There is also a gap fill above that we can look at.
Stay Focused!
This week sectors such as industrials, financials, and transports have started to fire squeezes to the downside, which is putting pressure on the SPY exchange traded fund (ETF) and could lead to a move lower.
Over the next few weeks, we’ll be looking for a pullback to the weekly 21 exponential moving average (EMA) for the QQQ and SPY. Now is a good time to consider hedging your long positions, and scaling down in position sizing should you open new longs.
Stay Focused!
This week the move into new highs that we’ve been waiting on from the QQQ exchange traded fund (ETF) finally unfolded, and we used that momentum as an opportunity to take profits into the strength.
With the boost of strength in QQQ, GOOGL (shown below) moved nicely into the 2+ average true range (ATR) extension this week. With that we bought back our put credit spreads to lock in the profits. All in all, we’ve closed just shy of $20,000 in profits on GOOGL from this move that started with the daily squeeze a few weeks ago.
With tech stocks now extended to the upside, and other sectors such as industrial (XLI), transportation (IYT), financial (XLF), and energy (XLE) showing some pretty big distribution, we are looking for the daily squeeze in the SPY (shown below) to fire to the downside over the next few weeks. One by one, as different “pockets” of the market start to sell off, this puts a lot of pressure on the index itself.
Technology could lead the way, but the charts are too extended here for new entries. As good as the tech charts may look, the downside pressure of the SPY potentially firing short could cause a move lower in tech as well.
As the saying goes, “as goes the markets, so goes the stocks.” With that being said we closed COST this week for small profits as we’re skeptical of the overall market here.
Moving forward, we suggest decreasing position sizes on longs and taking serious consideration to having a few hedges open. On Thursday, we sold an out of the money (OTM) call credit spread on the SPX with short strikes at 4,300 (chart above). We are looking for a flush to the weekly 21 exponential moving average (EMA) over the next few weeks. In Sunday’s newsletter, we’ll take a closer look at that trade and a few other potential setups we’ll be keeping an eye on.
Stay Focused!
After a volatile Fed announcement, the price dip in technology was bought up like crazy. Will this fuel the market higher or will tech creep back down with the lagging indexes? Patience is key for the rest of the week.
The 50-day simple moving average and the daily Ichimoku Cloud will definitely give us some insights into what the market may do next. The indexes will also be something to keep an eye on as we wrap up the week. Now we just need to sit and wait for the market to sort itself out.
Stay Focused!
The market hit an all-time high (ATH) and then chopped, so now we turn our attention to Quadruple Witching and keeping an eye on point of control (POC), as the stocks will likely be bouncing on and off of POC. Another thing to keep in mind is the Federal Open Market Committee (FOMC) address this upcoming Wednesday the 16th.
Here is our focus list for the week:
AAPL – Daily squeeze firing. We can see it potentially reaching 132-134.
NVDA – Through ATH and could continue to run. Broke a wedge on Friday and fired a 4-hour squeeze.
FB – Breaking a nice downtrend wedge, could push more and go through ATH.
GOOGL – If it continues to break ATH, it could easily work its way toward 2,500.
ROKU – Breaking a big wedge and also the daily Ichimoku Cloud. It could run toward 400.
SHOP – Breaking a big downtrend wedge. It could run toward a daily gap fill at 1,360.
Stay Focused!
As we keep looking for more upside in the market, it’s important that the stocks we are trading are part of a sector that has held its bullish structure over the past few weeks and will likely continue to do so.
While we saw signs of distribution in industrial and transportation stocks last week, the technology and semiconductor names still look poised for a move higher. With four-hour squeezes currently firing long, and new 30-minute squeezes setting up in both GOOGL and QQQ, we’ll be playing those 30-minute squeezes for the push into new all-time highs.
It’s “make it or break it” time for the market this week, as the odds of us moving higher will start to dwindle if the back-and-forth action continues.
Stay Focused!
The total chop-fest continued in the markets this week, even as the SPY (shown below) grinded to a new all-time high (ATH). Not much action to say the least as we go into the weekend, once again eagerly awaiting some momentum.
While the indexes were mostly flat/choppy this week, there were some pockets of the market that saw some nasty selling pressure, such as industrial stocks and transportation stocks. Take a look at names like UPS, FDX, and even CAT (which we traded profitably three times over the last few weeks). Despite their prior leadership, the bullish structure of each of these charts (shown below) broke down this week.
We are still looking for a move higher over the next few weeks for the markets, but observations like this are important, as we want to identify which group of stocks in the market are most likely to lead the way. While industrials and transports lost structure this week, we think technology (QQQ) kept up well, and is still poised for a move into new highs.
GOOGL continues to be our favorite pick when it comes to the tech names, and after closing over $15,000 of profits on the stock last week, we have initiated a few new positions here. As long as the QQQ continues to look poised for a run into new highs, we will be looking for the current 4-hour squeeze in GOOGL to fire long and push the stock toward (another) new high in the $2,450-$2,460 range.
We’re on the road this week, so we weren’t able to be as active at the charts as we’d typically like to be. However, we’ll be back to work this coming Monday, ready to take advantage of any potential momentum the market may (finally) have to offer! In this Sunday’s watch list video, we’ll dive deeper into the analysis of QQQ and GOOGL, and will take a look at a few other charts that are catching our eye, like PLBY and COST.
Enjoy your weekend, rest up, and Stay Focused!
With the market reaching that long anticipated all-time high (ATH) and then failing hard, the question becomes, “Now what?”
The biggest thing to watch and focus on is the S&P 500 Index (SPX) roll. While this is happening, we can expect some big pops and drops. Now is the time to be picky, be fast, and to focus on A+ setups.
Stay Focused!
A reversion to the mean (RTM) can be seen as a healthy reset for stocks. So while the status of the market seems to still be “pending” there are a lot of great A+ setups we can take advantage of this week.
Here is our focus list:
NVDA – Nice squeeze under all-time high (ATH). Keeping an eye on stock split confirmation to see if it will continue to push higher.
GOOGL – Strong after a RTM last week. If it breaks 2404, then it has a chance to test ATH.
SQ – Basing at 200-day simple moving average (SMA) and forming a wedge. If it can clear 220, then it has a shot toward 223, 227, and 230.
SNOW – Breaking big resistance near 244. If it can break through 253, then we’re looking for a move toward 262.
BYND – Its daily wedge is breaking. If it breaks through 156, then it can possibly test 163 and 170.
Stay Focused!