The S&P 500 (ES) closed below the daily Ichimoku Cloud on Monday, shifting market sentiment. We’ll be continuing our theme of “if this, then that” and using the daily Ichimoku Cloud as a compass. If price is above the Cloud, then we are very bullish. However, we’re already slightly bullish for this vulnerable market as the S&P 500 closed at lows on Friday below the daily Ichimoku Cloud. With this downside trend we’ll be focusing on higher lows to make our trades.
Here is our focused list:
GOOGL — On Monday GOOGL hit the bottom of the daily Ichimoku Cloud and continued to trade below the 50-day simple moving average (SMA). Use this as a compass to the downside. GOOGL dumped below the $2,666 level near $2,600 but managed to close above it. If GOOGL holds this $2,666 level watch for a move up to $2,743. If it drops toward $2,600, it could drag technology lower and potentially free fall to $2,500.
MRNA — Much needed pullback to the weekly mean. Broke out of its wedge and closed on Monday below the daily Ichimoku Cloud. If MRNA holds the weekly mean at $330, look for it to break $340, then $350, and up to $375. If it drops below $310 look for $292 as the next big level.
NVDA — Leaning bearish due to its daily squeeze firing to the downside and after it broke the daily Ichimoku Cloud on Monday. Arm acquisition decision on October 10 will be a big catalyst. Good news can make it explode, bad news could lead to downside pressure. Can NVDA work back up to $200 and get rejected or will it drop to the $194 to $188 range? If it can hold the weekly mean at $197 and work back toward $199, look to take NVDA to the upside to point of control (POC) at $207.
TSLA — Reported strong delivery numbers over the weekend for a big gap up toward $800 and then headed down toward the $780 level on Monday. If TSLA maintains the zone between $780 and $760 we’ll stay more bullish. If it drops below POC at $760, TSLA could add to the market dump and drag the SPX lower.
Stay Focused!