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We have a stacked week of significant events that could prove more difficult to trade than usual. It’s important to understand what these events are and when they are occurring so we understand price action better and stay out of trouble.

Here are the upcoming economic events we’re anticipating this week:

Wednesday, Dec. 15:

• Retail sales
• 1 p.m. Central Federal Open Market Committee (FOMC) meeting with Chairman Powell press conference

Friday, Dec.17:

• Quad-witching: Expiration of equity and index options along with futures
• Option Expiration (OPEX)
• S&P 500 Indexes rebalancing
• Nasdaq 100 rebalancing

Traders who aren’t aware of these events will have more skewed expectations of the market, especially with anticipation of the Santa Rally. By being aware of market events we are more ahead of the game and can prepare for opportunities.

Protect your account, stay patient, and size down until normal price action comes back (when we’ll be ready to attack hard). 

Here is our focused list:

GOOGL — Started the week with a reversion to the mean at the daily 21 simple moving average (SMA). GOOGL has a weekly squeeze with a gap to fill from $2,904 to $2,877, the bottom being the 30-day SMA. See if GOOGL can hold the daily mean and head toward last week’s numbers in the $2,980 range for a dip buy opportunity. If it moves to the downside, look for it to fill the gap and hit point of control (POC) at $2,863.

NVDA — Closed down 6.7% on Monday. If NVDA breaks the key level at $280, look for it to move to $271 toward the Ichimoku Cloud. We could see a bounce from $280 to $288 up to $300. Keep an eye on the semiconductor index (SMH) to understand if its overall sector could boost NVDA higher or add pressure to the downside.

SHOP — Dropped to the 200-day SMA on Monday. If we revisit the $1,380 area, we could see a decent dip buy opportunity. Look for it to work its way back toward $1,500.

TSLA — Has a gap to fill on the downside from $944 to $910. If TSLA can’t bounce at these levels, look for it to get to POC at $1,017 and revert to the mean from there. 

Stay Focused!

The bulls regained some control last week, as the S&P 500 (ES) and QQQ (NQ) traded above the 21 exponential moving average (EMA), in a bullish daily and weekly squeeze, and with stacked EMA’s and green 10x bars. This push in the indexes could lead the market to brand new all-time highs. 

Heading into the week, watch the 4-hour squeezes in the ES and NQ which could set the tempo for a big move. Keep in mind we have monthly expiration and the final Fed meeting of the year, which could lead to back-and-forth action in the short-term.

In today’s video, we’ll review clean setups that we’re looking to add exposure to, as well as scenarios that need to happen before we can take action on certain names.

Stay Focused!

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!