Leadership has been narrowing for weeks, and the indices are hiding it well. Underneath the surface a small group of names is carrying the entire tape, equal weight has been rolling over the whole time, and this morning the /NQ came back down to support at $29,000. A hard break below that level tells me the narrowing has finally started doing real damage.
The Trade I Have Not Touched in Five Weeks
NVDA, Weekly Chart 09.10.26
This is the setup that put me in. Stacked EMAs, price holding above the 21 EMA, and a Big 3 Squeeze underneath it with room to run into $250.
I have been long $NVDA December calls since the first week of August. It was a Big 3 Squeeze setup with a path into $250, and I treated it as a longer term swing from the day I put it on, risking the debit paid and nothing more. I ended up taking only half the size I wanted. The plan was always to add the other half on a meaningful dip.
The dip never came. The stock went straight up through August, which sounds like a good problem until you realize the trade never gave me the chance to finish it. When earnings landed on August 26 and $NVDA gapped into $225, it put up the biggest single move on my Scorecard that day. There was still nothing to do.
The Flush I Want Is the Flush That Could Break This Market
NVDA, Daily Chart 09.10.26
Where NVDA stands now. The move off the earnings gap held, and price is sitting well above where I got in, which is exactly why there has been no entry to add.
I want to add, but I am not going to force it. What I want is a hard flush with the squeeze pattern still intact underneath it. The catch is that the flush I need may be the same flush that breaks the tape. FOMC hits Wednesday, September 16, and anything goes into that print.
If the /NQ holds $29,000 and the pattern holds with it, that dip is where I finish the position. If $29,000 goes, the bears have the edge and the flush I was waiting on is something else entirely.
I posted this trade in both the Compounding Growth Live Trading Room and the Compounding Growth Alerts Room the morning I took it, and every update on it since.
What Would Change The Trade
I am risking the debit paid and nothing more, so there is no stop to get hit and no level that forces me out. What I am watching is the pattern. So long as the Big 3 Squeeze structure stays intact, the trade stays on and the plan to add stays live. If that structure breaks while the market is breaking with it, I stay at half size and let the December time do the work.
Five weeks in a winner and the only correct move has been to leave it alone, right up until the tape tells me which flush I am getting.
Stay Focused,
Taylor Horton
John Carter walked through the SPX data he uses to build an intraday directional read, and the replay is up. That is the stuff most traders never get to see. Watch the replay here.