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The biggest focal point all week was getting through the Consumer Price Index (CPI) report on Thursday morning. The disappointing numbers were revealed and the market reversed hard, with the S&P 500 (ES) dropping to point of control (POC) at $4,505.

This volatility roller coaster swung the ES higher midday and it broke above key moving averages. Following negative news from the Federal Reserve, the market dropped back to the mean at the 21 exponential moving average (EMA), flushed to POC, and drifted below it into the close.

News can accelerate technicals, so pay attention and see if the market sells off into the weekend. This dizzy ride will continue.

We’ll use key ranges to navigate the market moving forward. The POC at $4,505 is a massive line in the sand for the ES. Above POC, the market could see upside potential. However if the ES fails to break through these key ranges, it has a chance to rollover to $4,455 and even to the 200-day simple moving average (SMA) at $4,420.

It’s a whipsaw up-and-down type of market. As long as we are prepared, there’s nothing wrong with these volatile swings. We want to use lower time frames, buy low, and short high. 

The market can change in minutes and even seconds. Stay open minded and be ready to flip the switch at inflection points.

In the video above, We’ll cover the recent action of the Volatility index (VIX) as well as discuss names on our focus list like AFRM, UPST, GOOGL, and more.

Stay Focused!

 

 

The volatility train isn’t stopping yet. 

We have a light week in regards to the economic calendar, with the main event this week being the Consumer Price Index (CPI) on Thursday morning. As traders, we want to be aware of this index because it is a gauge into inflation that could affect the market. 

The structure of the market is starting to shift to the bearish side with tensions rising between Russia and Ukraine. This could lead to more uncertainty and fear in the market, further pushing away from a bullish scenario. Pay attention to the news flow because if any large event does occur, the market could change at any given moment.

One big level we want to focus on this week is the 200-day simple moving average (SMA) on the S&P 500 (ES). It’s a battle between the 200-day SMA and a reversion to the mean, showing the market is changing structure now that the ES is trading below the Ichimoku Cloud. Long story short, it’s going to take a lot of work for the bulls to take control. 

If the ES doesn’t break below the 200-day SMA, we could just stay in choppy territory. 

The ES will need to hit $4,600 to start slowly working its way back to bullish. Until we see things change structurally, we’re trading in a short-the-pop type of market. 

Here is our focused list:

NVDA – On Monday, NVDA held $240 and popped to $251, reverting it to the daily mean. If it keeps holding $240, it could revert to the mean again and head to $260. Point of control (POC) at $243 could be a good spot to buy. If NVDA gives up its strength and breaks below $240, we could expect a move to $230. 

SHOP — If SHOP holds and breaks above POC at $883, look for it to break through $915 and revert to the mean near $1,000. If SHOP rejects $883, it could drop to $800, $780, and potentially fill the gap to $745. 

GOOGL – Announced the stock split last week and has been selling off for a healthy pullback. Be patient with GOOGL. If it can trade through its 50 daily SMA near $2,820, it could push to POC near $2,866. Below POC, look for a move to $2,700.  

Stay Focused!

 

 

As a new week approaches, we’re seeing a lot of bearish structure, trend, and momentum. 

Earnings last week from companies like AMZN, FB, and GOOGL affected the major indexes and overall market. These big technology names failed to keep the market out of bearish territory. Until the structure in the indexes change and move bullish, like trading back above the daily and weekly moving averages, our thought is that the path of least resistance is to the downside.

Any bounces to come will simply be short opportunities.

Areas that we would not look to short are spots like energy, XLE, and XLP. Structurally these names are bullish according to our checklist criteria like positively stacked EMAs and green 10x bars.

Stick to the checklist. Look for bullish exposure in a potentially bearish market.

In today’s video, we’ll lay out names that are showing bullish strength and structure to position ourselves properly in this wild market.

Stay Focused!

 

It was a week of big earnings announcements in the markets with technology giants like GOOGL, FB, and AMZN reporting quarterly results. Safe to say, it was not dull.

We saw FB sink by more than 25% the morning after the Q4 announcement, while both GOOGL and AMZN exploded to the upside. With such strength in a heavily-weighted name like AMZN, one would think the indexes would react positively, but that wasn’t quite the case.

Outside of a select few spots in the market, most names are looking increasingly bearish as structure continues to break across major time frames. As kids, some of you may have played a game called “follow the leader.” In the current market that mindset is going to be important, as we are no longer in an environment where everything has the wind of the market at its back.

Examples of leadership in this market are energy and oil stocks, such as XLE, XOP, LNG, EOG, DVN, and many others. Unlike technology, semiconductors, and most other sectors, energy has a bullish trend, structure, and momentum (the BIG 3). So long as that’s the case, this will be one of the few spots we are looking to add bullish trades, while patiently waiting for better short entries on the indexes.

This week we were able to nail a nice move during the Compounding Growth Mastery session in DVN. This energy stock fired a handful of lower time frame squeezes for a solid move into our target of $56. Though a short-lived trade, it was good for a quick 45%+ return on risk. A nice trade, but we’re looking for more leaders like this one.

Heading into next week, so long as the bullish structure remains intact, we’ll be looking to buy dips on DVN, EOG, and a few other energy/oil names. Another interesting spot right now is XLP (consumer staples) which is home to solid setups in PG, KO, and PEP.

 

 

 

 

 

When you compare the current market to the environment we saw for most of 2020 into 2021, following the leaders – wherever they may be – is crucial to your success. No longer is the path of least resistance to the upside for the entire market, so our focus must shift to the select spots still showing bullish structure and momentum.

Follow the money, follow the leaders, and there are profits to take home consistently even in this wild market.

Stay Focused!

 

 

This has been a wild week of earnings. Earlier in the week, we saw GOOGL report and explode and FB miss and implode. 

On Thursday we had our last big technology name report for the week. Amazon reported its Q4 2021 earnings with a small loss of revenue, but announced it will boost the price of its prime membership. 

The question now is… 

Will AMZN save the market? Or will it fail to hold this move and roll over?

The S&P 500 (ES) has a new point of control (POC) for February at $4,505. On Thursday the ES chopped at this level before flushing into the close.

The Nonfarm Payroll report is Friday morning, which will be the focus for whether the news rallies the bulls or feeds the bears.

In this video, we’ll lay out the scenarios we can expect from the market and look at setups on NVDA, SHOP, and GOOOL.

Stay Focused!

 

 

We’re starting the first week of February off with earnings and job reports that could influence the overall market. 

We’re anticipating earnings announcements for AMD and GOOGL on Tuesday, META and QCOM on Wednesday, and AMZN on Thursday. These large technology and semiconductor companies play a big role in the market, so make sure to have these events on your radar. Personally, we love to trade these names after the earnings reports, so we’ll follow up with new key levels to watch later on this week.

We’ll get a glimpse into the economic status from January from the ADP Nonfarm Employment Change report on Wednesday morning and the Nonfarm Payrolls report on Friday morning.

In today’s video, we’ll review our thesis on the market heading into the new month, specifically analyzing the daily and weekly charts on the S&P 500 (ES).

Here is our focused list:

NVDA — Could explode or dump after AMD earnings. NVDA has a big key level at $248 and if it breaks this level, we could see a reversion to the mean at $254. If NVDA stays above $240, we can expect to be bullish in the short-term. If NVDA breaks $240, we’re back at the $230 range.

SHOP — Bouncing back to major key levels. If SHOP breaks $1,050, we could see an upside rally and a reversion to the mean at $1,050. SHOP could fail to break this level and fall to $900 to a downside target at point of control (POC) at $853. Upside target for the week could be near $1,030.

Stay Focused!

 

 

With a loss of market structure and momentum, the path of least resistance is showing to the downside. 

We’re looking to price out a call credit spread on the QQQ. If we can lock in that trade, we’ll look for an exit above $375 which is the weekly 21 exponential moving average (EMA). To the downside, we’ll look for a profit target near the recent low at $330.

Ideally we’re looking for a big bounce in the indexes early next week. Because of trend, structure, and momentum, our plan is to short the bounce.

Stay Focused!

 

As the indexes begin to look increasingly bearish as the weeks go by, it’s important to keep in mind that many of the same principles that keep you profitable in a bullish market will serve you well in a downtrend.

A great tip for newer traders is to look at the inverse charts of the current indexes (to look at inverse charts, just enter a minus sign before any ticker). Looking at the inverse charts will likely be more “familiar” as the inverse of the indexes looks bullish.

 

 

Looking at the inverse chart of the QQQ above, while it looks bullish, it is far too extended to get aggressively long at these levels. In an uptrend, we would wait for the next dip to the 21 exponential moving average (EMA) before getting short. 

Taking that same principle, when we look at the actual QQQ, though it’s bearish, it is far too extended to the downside to place a good short here. With that being said, we are looking for bounces early next week, ideally into the 21 EMA as our next opportunity to enter a low-risk, high-reward short.

 

 

Since volatility is what brings the market down, we’ll need to see the Volatility Index (VIX) flush back to its own 21 EMA next week to give the indexes a chance at rallying. If the VIX – some call it the “fear” index – can in fact fade to the downside, we’ll be ready to enter some shorts on the indexes. We’ll be watching for a break under the recent lows into February and March.

So long as the structure is bearish, we’ll be looking to play the “ebbs and flows” of the market in the path of least resistance.

Stay Focused!

 

 

Now that we made it through the Federal Reserve meeting, let’s lay out a few scenarios moving forward to continue trading strong.

The S&P 500 (ES) dropped hard following the Federal Open Market Committee (FOMC) statement, popped Thursday morning, and now the market is stuck in chop. 

The ES is in a consolidation phase stuck between two big inflection points. First the ES broke through the $4,492 zone with the 200-day simple moving average (SMA). Now it is trading above the lower inflection point at $4,260 and the low of the week at $4,126.75. 

The overall market is trending lower, and volatility remains high. As long as the Volatility Index (VIX) trades above 20, downside volatility is favored.

The catalyst that could influence what we see next is the ongoing earnings season. We are picking up into the heart of this earnings season, anticipating the AAPL report on Thursday night and AMZN and GOOGL coming up next week.

The earnings releases could change the sentiment of the market or add fuel to the fire for selling. 

Watch the video above for potential scenarios we could see in the overall market and our focus list of actionable setups moving forward.

Stay Focused!

 

 

We’re anticipating another volatile and eventful week as we have multiple catalysts that can impact the overall market.

We’re getting into the gist of earnings season after banks earnings last week. This week we are anticipating releases from big technology names like MSFT on Tuesday, BA and TSLA on Wednesday, and AAPL on Thursday. NFLX got destroyed after its earnings last week, so we’re interested to see if we can find new plays on the technology stocks going forward.

On Wednesday at 2 p.m. Eastern we’ll see the Federal Open Market Committee (FOMC) statement followed by Federal Reserve Chairman Jerome Powell speaking at 2:30 p.m. Eastern. The market will most likely head lower into the FOMC meeting, which is why it’s so important to understand how these economic events impact the market.

We’ve been in a short-the-pop type of environment since Powell’s last statement on Jan. 5 with incredible opportunities to short the market. The S&P 500 (ES) closed below the 200-day simple moving average (SMA) on Friday, taking out huge levels.

That being said, we’re mainly focusing on playing the overall market on SPY, QQQ, SPX, etc. 

Here is our focused list:

NVDA — At large technical levels after breaching below the 200-day SMA. NVDA showed relative strength after closing above the 200-day SMA on Monday. This could be a nice pop for a dip buy if NVDA retests the 200-day SMA. Potential targets to the upside could range from $250 to $255.

Stay Focused!