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The market is currently overbought. The major things we want to look for are signs of exhaustion.

Once the market hits 2+ average true range (ATR) moves above the daily 21 exponential moving average, it could still push toward 3+, 4+, or 5+ ATR. The major signs of exhaustion are when the lower timeframes begin to switch from bullish to neutral.

At this point, the S&P 500 (/ES) is trading above the daily 21 EMA. We want to focus on the structure below the surface. We know the market is extended, but how far will it go?

The S&P 500 (/ES) has a 2-hour squeeze with Big 3 buy signals. Trend, structure, and momentum on the 2-hour, 1-hour, and 30-min time frames show that the path of least resistance is still to the upside.

We’d love to see a flush, potentially to $4,150, to get better entries for swing trades. For now we’re looking to see how far the market can go. We could see a push toward the 200 simple moving average (SMA) and make a run to $4,300.

The market is extended, but it’s not showing signs of slowing down just yet. 

Get Taylor’s trade alerts sent right to your phone with the Compounding Growth Mastery! We’d love to have you join for a trial. In this Sunday’s watchlist video, we’ll review trades we’re looking to buy on a dip including AAPL, TSLA, and NVDA.

Stay Focused!

 

 

After consolidating into Core Consumer Price Index (CPI) on Wednesday, the S&P 500 (/ES) broke out to higher levels. Let’s see if it can hold.

 

Market Overview

If /ES does hold $4,212, it could work its way back up to $4,260. The next target will be the 200-day simple moving average (SMA) at $4,329. If /ES fails at $4,212, it may pull back to either $4,189 or Point of Control (POC) at $4,136.

Exploding into CPI news on Wednesday, the Nasdaq-100 futures (/NQ) dropped to its Point of Control (POC) at $13,271. If /NQ continues to pop on Friday toward $13,356, it could fall, break $13,271, and possibly drop to $13,150.

Continue to pay attention to the relationship between the Volatility Index (VIX) and /ES for a potential pullback as VIX holds $20. 

 

Potential Setups

Many setups have unfolded, one of them being COIN. After its rally on earnings Wednesday, it dropped back to $85. See if it can find its feet, pop toward $88, and fail down toward $79. 

SHOP finally broke through its zone above $42, and then dropped back under the zone to $39. If it breaks $40, our next target is our prior CPI top of the zone at $38.

 

I’ll be live in the Simpler Day Trading room this week. Tune in to trade these setups with me live and look for more potential opportunities in the market.

Stay Focused!

 

Earnings and Economic Events This Week

 

Earnings: COIN, RBLX, TTD

Another week of earnings is ahead of us. Notable earnings this week are Coinbase (COIN), Roblox (RBLX), and Trade Desk (TTD), which report on Tuesday.

 

Economic Events: CPI, PPI, Jobless Claims

As far as economic news, the Core Consumer Price Index (CPI) will be reported on Wednesday at 8:30 a.m. Eastern, followed by the Producer Price Index (PPI) and Jobless Claims on Thursday morning.

 

News: 

Last week, Tesla’s 3-to-1 stock split was approved and is going to effect on August 25th. Keep an eye out for potential opportunities as we head closer to that date.

COIN had news last Thursday of its partnership with Black Rock. This caused a good move in the stock, so pay attention to Tuesday’s earnings report.

 

Market Overview

Last week the S&P 500 (/ES) sat at $4,100 and hit a low of $4,081. On Monday, /ES rallied back to $4,153. Nvidia (NVDA) reported a large miss in earnings, missing the mark by $2 billion and causing /ES to drop below $4,153. 

If the /ES starts to break down, our first target is $4,100 and then $4,081.

If /ES continues to fail, it could revert to the mean and bring /ES to $4,032. If /ES gets back through $4,188, our next target is $4,212. Let’s see if the /ES holds structure and finds its feet.

Keep an eye on the structure of Nasdaq-100 futures (/NQ). With NVDA news, /NQ has worked its way back to $13,150. Our next key level is around $13,025. 

If /NQ finds its feet, it could head back toward its Point of Control (POC) at $13,271.

 

Focused List 

Here is our focused list:

NVDA— With negative news, we have our eye out for NVDA and its structure to the downside at $160. Into CPI, if NVDA stays under $174, our next target is $170. Our second target is at $160.

SHOP — We want to take advantage of SHOP as it continues to feel selling pressure around $40. If SHOP can pop to structure at $40.68, we’ll look to short the pullback to $37 and potentially $35.

 

I’ll be live in the Simpler Day Trading room this week to cover the market open. Tune in to trade these setups with me live and look for more potential opportunities in the market.

Stay Focused!

 

 

 

We’re zooming out to the monthly chart to identify our edge.

The AAPL monthly chart is printing a buy signal. Until that buy signal disappears, the odds are in favor of the squeeze firing to the upside. This could push AAPL and TSLA to +2 to 3 average true range (ATR) and to new highs.

We’ll need a reset in the market to stack the probabilities in our favor. We’re looking for the SPY and QQQ to pull back near their 21 exponential moving averages (EMA).

In the video above, we’ll list names on our focused list, identify our ideal entries, and analyze the inverse chart of the SPY.

Stay Focused!

 

 

The markets finished the week relatively neutral. There are setups that fit the bill of our “buy the dip” checklist like ZM and CHWY. The issue is the SPY and QQQ are slightly oversold.

While CHWY and ZM are not oversold, we know that “as goes the market goes the stocks”. Our best bet is to wait patiently for a pullback. 

 

 

The ideal time to take these trades is when the SPY and QQQ pull back to the 21 exponential moving average (EMA) and are set up to move to 2+ average true ranges (ATR).

In the video above, we’ll review the SPY and QQQ and introduce setups on our watchlist.

Stay Focused!

 

 

The bulls are in control ahead of the major catalysts on Friday.

The first week of August has been a relatively steady week for the markets. On Thursday evening, we’ll hear the results from the Tesla shareholder meeting on the TSLA 3 to 1 stock split.

On Friday, the Nonfarm Payroll (NFP) report will be released, which could be part of the reason for a “calmer” week. The Senate will also vote on the $7,500 EV credit before the end of the week.

There are major key levels on the S&P 500 (/ES) now that the market is rallying to larger ranges. These levels have caused major pivots in the overall market.

As long as the /ES stays above last Friday’s low near $4,081, we anticipate the bulls will stay in control. The daily Ichimoku Cloud is showing a flatline level around $4,074, which we’ll use as a line in the sand. We can use this mini zone from $4,074 to $4,081 as a level of support for the bulls.

In the video below, we’ll lay out the road map for the next week and review setups on our focused list including SHOP, AMZN, and TSLA.

Join me live in the Simpler Day Trading room this week to cover the market. To trade these setups with me live and look for more potential opportunities in the market, click here!

Stay Focused!

 

August is starting with earnings and ends the week with Non-farm payroll (NFP) on Friday. Our main focus is AMD earnings on Tuesday after market close. We’re also keeping our eyes on the Tesla (TSLA) shareholder meeting on Thursday as they vote on a 3-for-1 stock split. In the videos below, we’ll discuss how NFP can shake up the market, break down the structure on /ES and VIX, and dive into our focused list setups, including TSLA and SHOP.

 

Earnings & Economic Events

 

Market Overview (/ES, /NQ, VIX) 

 

Focused List: (GOOGL, AMZN, NFLX)

 

Join me live in the Simpler Day Trading room this week to cover the market. To trade these setups with me live and look for more potential opportunities in the market, click here!

 

Stay Focused!

 

Last week, the bulls ran both the S&P 500 (SPY) and Nasdaq (QQQ) straight to their daily 21 exponential moving average (EMA).

This week stay disciplined. We are looking for opportunities to get long on dips and take advantage of squeezes near the daily 21.

In the video above, we’ll review how to apply the Big 3 buy signal to our trading this week and what steps to look for in potential opportunities in names like Bitcoin (BITO).

Stay Focused!

 

The bulls made additional progress this earnings week. With the dip on Tuesday to the 21 exponential moving average (EMA) being held for the first time since August 2022, the bear market is looking done and over with.

Many names are above the weekly 21 ema and extended on the daily chart. We’ll want to look for a dip and hold to potentially start buying.

Let’s be disciplined right now, and focus on the price action and structure. Based on this current change of structure and the Big 3 buy signals getting rid of every sell signal, we’ll wait to see if these flushes behave as a bullish trend. 

In the video above, we’ll review the Big 3 signals across multiple timeframes on the major indexes, and discuss major structural changes in the S&P 500 (SPY) and Nasdaq (QQQ). We’ll also walk through our trades on XLE and COIN in the Compounding Growth Mastery this week.

Have a great weekend, and stay Focused!

 

In bear markets, we need to understand the concept of cover pops. There will be big pops in bearish markets, and we don’t want to fall susceptible to these pops.

When the market drops hard, there will be major moves to the upside. 

A cover pop is when people, such as big money, are shorting the market. If the market tries to reverse, it’s a sign of them exiting their positions to take a profit. It’s often used to reset the market and take it back to its normal pace.

As stocks start to go up, big money (who shorted) tries to exit positions. This causes buying pressure, making the stock explode. This usually happens during major moves to the downside and can last from one hour to a few days.

Another example of a cover pop is when large moves turn around and are followed by a big spike. After the pop, the stock resets and drops again. 

Let’s break it down in the example below.

As traders, we want to recognize these cover pops so we avoid guessing which direction names will go next. 

We hope you’ve enjoyed this breakdown on when cover pops happen, what they look like, and how we can align ourselves and apply proper logic when these moves occur.

Especially in volatile conditions, we can use this edge to better understand what’s happening in the market and take advantage of these moves.

If you’d like a rundown of how my strategy works during conditions like these check out my 4-hour Scalping Secrets Course.