During this short holiday week we saw the indexes revert back to their daily 21 exponential moving averages (EMA) for the first time since early October. As goes the market goes the stocks, so we saw some selling pressure in FANG stocks this week as well. However we believe there’s a lot to love about this dip…
In terms of structure nothing has changed about the indexes, AMZN, AAPL, TSLA, and other names we’ve been focusing on. AAPL continues to hold up well, while AMZN, TSLA, and GOOGL have all reverted to their mean. We think this opens the door for some nice entries in long positions.
So long as this dip in the market doesn’t begin to break structure of major timeframes, we continue to think the weekly squeezes in the QQQ, AMZN, AAPL, and GOOGL are poised to fire long into the end of the year.
One chart to keep a close eye on here is the volatility index, the VIX. Per usual, VIX is spiking as the indexes are reverting back to the mean. Before we can have confidence that the market is ready to find support and turn back toward the highs, we’ll need to see VIX die down and start fading back towards its own 21 EMA.
In Sunday’s watchlist video we’ll dive in and take a look at this week’s action, along with the top setups on our watchlist and an updated look at our current positions.
Stay Focused!