The AMD report is upon us, and I recorded this video just a few hours before the number. SMH, QQQ and Nvidia are all sitting on major support at the same time that my Scorecard just printed the weakest QQQ reading since May. The squeezes on these charts still have not fired, and a report like this is exactly the kind of catalyst that forces them to pick a direction. I want every level mapped before it hits, so let’s take a deeper look at the AMD earnings squeeze:
Why the AMD Earnings Squeeze Matters for the Chips
AMD carries a Big 3 Squeeze into this report, and the rest of the semis are coiled right alongside it. SMH, the mother ship of the chip basket, has already given back a big piece of its run over the last couple of weeks. It pulled back to the 200 SMA, tagged the $500 level, and came within reach of the rising 50.
That leaves two clean scenarios: A strong AMD report that gaps SMH back into the $560 to $570 range puts the squeeze in position to break long. A miss that drops SMH below $500 shifts the odds, and from a probability standpoint I expect that squeeze to break short. I don’t need to guess the number, price will show me which side wins.
The QQQ Scorecard Just Hit Its Lowest Read Since May
My Scorecard tracks how strong QQQ is relative to its own best score, and the path since May tells the story. In May, QQQ averaged 85% of its best score. That is an environment where almost everything works: buy the pullback, buy the breakout, stay long. July cooled off, while August and September held up well.
November is only two sessions old, so this is still an early read. QQQ sits at -44% of its strongest score, the lowest reading on the chart going back to May.
Where the AMD Earnings Squeeze Leaves QQQ
QQQ has worked down to the rising 200 SMA and is holding it for now. The bigger point is that I don’t think the real move has happened yet for QQQ, SPY, Nvidia, Micron and SMH. For most of these names, that move comes off the squeeze.
On QQQ, $670 is the line. Momentum has already flipped to the sell side, while trend and structure both sit at neutral. Lose the rising 50 and structure turns bad. Bad momentum plus bad structure inside a big squeeze is how you get a violent washout, and that risk is real.
I still own the $700 calls for December expiration, and I don’t plan on adding into this weakness. A strong candle close back above the 21 EMA is what earns another nibble, and until the AMD earnings squeeze resolves, that position stays exactly as it is.
My Nvidia Calls Sit on the $200 Level
Nvidia has a lot riding on the AMD earnings squeeze too. It pulled back to the big $200 level, which also lines up with the 50 SMA. I hold a handful of the December $200 calls, and I want more of them.
While I want to go long, I also respect the idea that there may be more downside shorter term. If Nvidia loses $200 while QQQ breaks down, this whole group can start breaking short together. The indicator is mixed right now: decent trend, good structure, and bad momentum with Nvidia’s own earnings still ahead. For the bigger swing trades, this is a hurry up and wait market.
Tesla Is the Short-Term Standout in the Big 10
Off the Big 10 basket, Tesla is the clear short-term standout. It has a squeeze building, and if there is a path from roughly $400 back to $420, the old lucky 420, that squeeze is how I want to play it.
The setup is not ready yet. Right now the indicator check reads neutral trend, bull structure and bear momentum, which adds up to 8 points out of 15. I want price back above the buy zone at the 21 EMA with good momentum and good structure, a full 15 out of 15. When that lines up, a cheap out of the money call debit spread for the move into $420 makes sense. Until it does, I stay patient.
The Oracle Short I Want, Just Not Today
I usually find it easier to short the indexes than individual stocks. If I had to pick one name to short right now, it would be Oracle. It has a squeeze with a -15 reading and several more squeezes stacked behind it. Flip Oracle onto the inverse chart and it looks like a textbook long: buy above the 21 EMA, take profit at the extension.
Today is not the day to press it. If QQQ breaks lower with conviction, I can either short QQQ or go short Oracle. If the Oracle squeeze breaks short, I think it can run down toward $100 per share. The risk is a gap of about 10% higher overnight. That move would not change the indicator, though it would mean taking the hit on the chin.
For now, I am staying patient and hunting for a couple of good day trades per week while these bigger squeezes pick a direction. If you missed last week’s trade breakdown, here is how I handled my AAPL call trade into FOMC and the SPX spread that followed.
Let the squeeze fire before you commit to a side.
Stay Focused,
Taylor
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