Bulls Making Progress
Happy Friday, traders! The bulls made decent progress this week. Both the SPY and QQQ traded above their daily 21 exponential moving averages (EMAs).
The big question for next week is whether or not the bulls can keep the progress they’ve made and continue to grind the markets higher.
The market isn’t suddenly bullish just because the indices are above their daily mean. However, it is a step in the right direction should July see the markets rallying higher.
If the bulls have control over the next few weeks, we’ll focus on opportunities in our favorite setup: squeezes with the Big 3 buy signals.
Squeeze & Big 3 Buy Signals
The power of the squeeze is it can lead to the “release of energy” needed to trigger an explosive move—first compression, then expansion. The Big 3 signals help us determine which direction the squeeze is more likely to fire.
This week, we ran our scans daily, looking for these setups. We were able to find opportunities using this criterion. One of the better examples from the week was the 30-minute squeeze in Zoom (ZM), which we took profits on Friday morning. This short-lived trade was good for a 50% return on our calls.
For these lower time frame trades, we’re looking for stocks trading above their daily 21 EMA with squeezes and Big 3 buy signals on the lower time frames. ZM had the “squeeze and signal” combo on the 30-minute and 60-minute time frames.
Remember, these squeezes are the moment in time when a stock is gearing up for a move. The Big 3 buy signals tell us the odds favor the squeezes firing to the upside.
Short-Lived Bullish Opportunities
As you are building your bullish watchlist this weekend, focus on finding stocks that fit this criterion. A stock above the daily 21 EMA with lower time frame squeezes can offer the short-lived bullish opportunities we’re looking for in this market. For now, the days of taking swing trades based on daily charts is in the past. We’re forced to focus on these lower time frames to uncover the opportunity.
Keep an eye on your inbox for this Sunday’s watchlist video, where we’ll cover a handful of setups similar to the one we traded in ZM this week.
Stay Focused!