Back from the long weekend, and the theme has not changed: leadership is narrowing. Big tech and energy still rank at the top of the Big 3 Scorecard, financials took the hardest hit today, and biotech and healthcare are not close. QQQ, the Invesco QQQ Trust, sits at 74% while RSP, the equal weighted S&P 500 basket, sits at negative 2. That gap tells you a handful of names are keeping the entire ship afloat.
I opened a brand new position in ARKK, the ARK Innovation ETF, on the back of a Big 3 Squeeze that finally has all three pieces. Momentum was the one holding it back, sitting on the sell side ever since the MACD turned negative last November, and the bull shift printed a couple of weeks ago. Structure, trend and momentum inside a squeeze gets me a perfect 15 out of 15, so I bought a mix of in the money and out of the money December calls looking for $95 to $100. The idea is wrong under $78 and change.
The rest of the board is built and waiting. NVDA is still one of the better charts I own, and I am holding the December $200 calls. AMD, Advanced Micro Devices, Taiwan Semiconductor, Micron, Dell and SanDisk are all coiled up on the same condition: QQQ and SMH, the VanEck Semiconductor ETF, printing buy triggers of their own. QQQ scores 13 of 15 with no momentum, and a MACD line back above zero opens the door toward $780.
That is what I am being patient for. Roughly 80% of the time this market chops you back and forth, and the other 15 to 20% is where clean direction and easy price action show up, which almost always starts with a big squeeze on the indices. Every chart I mentioned is broken down in the video.
Stay Focused,
Taylor Horton
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