Uncategorized

The bulls fought back with vengeance this week, reclaiming structure to the daily chart. At this point, the weekly and daily squeezes in the indexes look poised to take us to new highs into the end of the year and early 2022.

One potentially powerful setup we’re seeing right now is the “triple squeeze”. This occurs when a stock is in a squeeze at the same time as squeezes occurring in its sector and the overall market.

One example of this is NVDA. It’s currently printing a daily squeeze, right along the SMH (Semiconductor ETF) and the overall market, the SPY and QQQ. Other examples of this currently are MSFT, GOOGL, AMZN, and GS. These triple squeezes will be our major focus into the end of the year.

Remember the domino effect at play. If a daily squeeze can fire, it can trigger the 3-day squeeze in the process. If the 3-day squeeze fires, it can potentially trigger any squeeze on the weekly time frame. Momentum on momentum. AAPL is the poster child of what can happen when nested squeezes form (a move we took full advantage of).

The major indexes, big semiconductors, and big technology are squeezing. Together this could offer one final big push into the end of the year. We’re still holding swings in AMZN, QQQ, and AMD and are looking for our next spot to add exposure.

Stay Focused!

The market is setting up unique opportunities this week and next as we anticipate the Equity Index Roll (SPX Roll). This is an important event that occurs every quarter and takes a toll on the market, so it’s important for traders to be aware of this. 

The SPX Roll is when big money, firms, and institutional players sell and close out their current positions and “roll out” to longer-term expirations. The roll began today, Dec. 9, ahead of expiration on Friday, Dec. 17. 

With this in mind next week, we will see periods of selling off across the market. Be mindful that if price action randomly starts to drop or pop, this may just be a sign of SPX Roll. What is more important is that we focus on our ranges to see if selling is just a result of the rollover or if the market is making directional moves.

In the video above, we’ll define these key ranges, discuss setups on our focused list, and define areas of opportunities to look out for as the market rolls on.

Stay Focused!

The overall market is in play after ending last Friday on a vulnerable and volatile drop. We’re prepping and watching specific levels to determine where the market is heading. 

The S&P 500 (ES) is pinching between two levels, holding the 50-day simple moving average (SMA) and rejecting the 21-day exponential moving average (EMA). 

There are three major compasses we will use to navigate this market… 

1. The first bullish step is seeing if the ES can hold the 50 SMA. 
2. Look for the ES to break the 21 EMA and continue to trade above it. 
3. Eyeball the trendline that is forming to visualize next potential moves. There is a good chance the ES will break out of this wedge and head toward the zone from $4,549.60 to $4,592.00.

Here is our focused list:

GOOGL — Bottoming at the Ichimoku Cloud and lingering near the 50 SMA. Focus on $2,788 as this was the level that ripped GOOGL to new highs. This is a good place to buy the dip at the Ichimoku Cloud and play it up past the 21 EMA. Look for GOOGL to hold $2,850 to $2,888.

SHOP — We do not have a bias either way, but there is great potential for a dip buy ideally at the 200-day SMA at $1,357. Look for a move to $1,470, $1,500, and $1,520 this week.

Stay Focused!

Once we have a better understanding of where the indexes and volatility will go from here, then we can focus on building a watchlist of individual stocks. I’m still holding my long positions on AMZN, NFLX, and TSLA and took profits in our AAPL trade in the Compounding Growth Mastery this week. The key level we’re focusing on right now is the 21 exponential moving average (EMA). 

Watch the video above for a full rundown on the structure of the major indices and which scenario would result in a bullish or bearish trend.

Stay Focused!

As the markets continue to sell off, we are sticking to a simple game plan as we work through this volatility. We have a key level, and we know exactly what to look for at that key level in order to make our next round of trade decisions.

Here is what we’re looking for on both the upside and the downside.

BULLISH SCENARIO:

Key Level: Weekly 21 Exponential Moving Average (EMA)

In order for this bullish trend to continue, we will look for the SPY and QQQ to find support at the weekly 21 EMA. In a bullish uptrend, a dip to the weekly 21 EMA is often a great buying opportunity.

The key here is that we see support at the mean along with a big flush in the Volatility Index (VIX). If that can unfold, the last piece of the puzzle is to see momentum shift to bullish across all lower time frames. If and when this unfolds, we will look for the market to continue the trend to the upside.

BEARISH SCENARIO:

Key Level: A weekly-close under the 21 EMA

In the event the indexes get a weekly close under the 21 EMA, that is the first potential sign that the trend is at risk of shifting to the downside.

After a close under the weekly mean, we would wait for the first oversold bounce to the unsold. If that oversold bounce gets rejected at resistance under the weekly 21 EMA, we would look to short for a flush back to the lows.

During volatile times, anchoring your decisions to key levels such as the weekly mean can make your job of being patient, disciplined, and prepared for the next move that much easier.

Stay Focused!

In this special, early edition of Focused Trades, we’ll walk through my morning prep and discuss what zones we’re watching in this vulnerable market. The overall market is breaking down and firing squeezes, which is when we like to move our attention toward playing the markets.

Since the S&P 500 (ES) hit the high at $4,740.50, the market has become vulnerable, trading at tricky levels. The market is in bearish territory as every pop in the ES hit the 21 exponential moving average (EMA) and rejected it. As of Wednesday, the ES is officially below the 50 simple moving average (SMA).

Another big focal point is the daily squeeze in the market as momentum is setting up. Our biggest key level in the ES is $4,549. If the ES can head toward that zone we can see great short opportunities.

Watch the video above for key zones we’re watching and a breakdown of the three major indices. 

Stay Focused!

The market ended last Friday with high volatility despite the holiday weekend. The S&P 500 (ES) dropped from its high at $4,740.50 to the low of the day due to the new COVID-19 variant that temporarily spooked the market. 

We don’t expect the day-to-day shocks to end anytime soon as the market will continue to react to certain COVID-19 news. If the market gets conditioned to the news, we might not see as much action as we did on Friday but won’t be surprised by future reactions. 

If negative news is released, we could very likely see fear trickle into the market. We’ll keep reacting to the looming catalyst day-by-day.

One thing we can do is rely on the technicals. On Monday the ES had a relatively green day, engulfing almost half of Friday’s drop. We are still in a volatile market, so it’s important we have compasses that we can follow including the 50 simple moving average (SMA), daily mean, and daily squeeze.

Here is our focused list:

GOOGL — Kissed the trendline and 50 simple moving average (SMA) on Friday for the third time since October. Be patient, and if GOOGL can’t break through the daily mean at $2,850 it could drop below the trendline to $2,800. GOOGL currently sits in a daily squeeze and if it can break through the daily mean, the squeeze could fire to the upside through point of control (POC) at $2,909 to the $2,980 range. 

MRNA — Gapped above and held the daily Ichimoku Cloud on Monday. MRNA is approaching the flat top line of resistance on the Ichimoku Cloud at $375. If it rips through the daily Ichimoku Cloud at $380, MRNA could reach $400. It could also get rejected and pull back for a quick short opportunity to POC at $343 or the 50 SMA at $322. 

NVDA — Sitting at the highs in a 4-hour squeeze. While NVDA is extended, if it can squeeze and break through its all-time high (ATH) at $346 we could see it rally higher. We could see a dip buy opportunity if NVDA drops to $330 or to POC at $323. 

SHOP — Currently trading at the daily mean. As long as it holds $1,540 there is a potential dip buy opportunity to $1,600 and $1,660 this week, and potentially farther through $1,700. Look to buy SHOP low and sell it high. 

Stay Focused!

The market saw no dull moments during this shorter week as we rolled into the end of the month. The market experienced selling pressure on Friday due to the new coronavirus variant, but we’re maintaining our focus on the charts.

The Nasdaq (NQ) was down 2% on Friday, but the weekly structure held strong, accompanied by a new daily squeeze. If the NQ can find support, this daily squeeze could fire the NQ to the upside, even if it retreats to the 21 exponential moving average (EMA). 

The S&P 500 dropped about 2.5% on Friday with potential for a buying opportunity if it falls to the 21 EMA around $4,500. 

The Volatility index (VIX) boosted almost 50% on Friday, and if it continues higher we can expect more selling pressure. We likely won’t see a Santa rally unless the VIX moves lower. 

Focus on structure, run your scans, and build a watchlist based off setups with the better trends. Our plan is to remain patient with our trade ideas and execute once the VIX dies down.

Watch the video above for our plan moving forward on setups like AMZN, AAPL, and GOOGL.

Stay Focused!

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!

The market showed volatility on Monday at the start of the shortened holiday week. The market will be closed on Thursday for the Thanksgiving holiday and will open for a half day and close at 12:00 pm Central on Friday. 

The holiday week could bring more volatility with big money causing increased price action. On the other hand, the market could see an “early holiday”, where we can expect chop to finish the week. 

Keep in mind that premiums could get aggressive. Size down, have fun, and understand the type of conditions we are dealing with. 

The market had a decent selling day on Monday, as the S&P 500 (ES) lingered near its high at $4,740.50. After last week’s options expiration, volume picked up and started a textbook reversal.

We’re working with a lot of the same key levels as last week now that the ES dumped to our key zone through point of control (POC) at $4,695 to the lower POC at $4,673 on Monday. 

While we’re mostly focused on trading the overall market this week, let’s review some key setups that could lead to strong opportunities. 

Here is our focused list:

GOOGL — The trendline aligned with the daily mean at $2,928 on Monday. If the market does move higher, we could see a dip buy opportunity at the mean. If GOOGL breaks its trendline, it could drop to POC at $2,909 to $2,891. If it starts to grind higher, we could see a move to POC at $2,969 and potentially to $3,000. Be patient and see if technology continues its weakness.

NVDA — Pay close attention to NVDA because it has been a strong name this year. It had another gap on Monday that could lead to a potential dip buy opportunity. If the market becomes more bearish, we could see a move to the range from $313 to $305. With POC at $304, this further confirms a gap fill. If it goes further, NVDA could revert to the mean at $287.

Stay Focused!