I hope everyone is having a great weekend and enjoying some time away from the screens.
Starting to notice some decent follow-thru on some of these earnings beats that have nice daily charts. There are definitely some big names left to report and about another few weeks of earnings. But after that we will most likely start to see the smallcap market start to heat up. I trade both the large and the small caps, and everything in between. I know you hear a lot of people out there that will tell you that you shouldn’t do that and that you should focus on a narrow niche, but my response to that is that I DO focus on 1 thing and 1 thing well. And that is a focus and study on the WAY STOCKS MOVE. And I can guarantee you that if you learn how to read a trend and the way that different timeframes work together, then you too can learn to trade any stock, or any vehicle for that matter.
And in learning this, it will set you free from having to rely on others for ideas, which is the next point I want to get into. I do these preps for myself, and not just on Sunday, but each day of the work week as well. In doing the Sunday prep in this public forum, I don’t ever want you to think that the idea is for you to try and copy my ideas. In fact, without proper risk management, these preps can be just as dangerous as they are helpful. Unfortunately we live in a day and age where copying ideas and being spoon-fed seem to be what people expect. There is this overwhelming theme of laziness that permeates through society. I’m not only talking about in the market, but it can definitely be seen here.
The last thing I want to do is sugarcoat this, so let me be very blunt; if you think that you can just copy other’s trade ideas and you don’t need to learn how to manage risk or read what price is trying to tell you, you WILL NEVER BE SUCCESSFUL, PERIOD. Use these Sunday Preps as a way to learn what it is that I’m looking for and then apply those concepts to identifying your own trades. That doesn’t mean you can’t look at my ideas and then make them your own. In fact, you should. But that includes making a full gameplan, complete with if/then statements for ALL scenarios. I want you all to succeed, but that involves putting in the work. Start to take responsibility for all things in your life. It will serve you well not just in the markets, but in all aspects of your life.
$ES / $SPY
The S&P had a really nice strong push all week long. Kind of hoping we can get a speed up into that 4500 area for a nice extended look to set up some nice short opps. If that doesn’t happen, I would be watching for retraces back to the 20d/quarterly pivot/4400 psychological level to act as strong support. Below that we still have that 4365 area that will offer another high probability area.
$NQ / $QQQ
Tech actually seemed to lag last week in comparison. It had a strong Thursday and Friday, but earlier in the week you can see we came back into the 20d. We have a monthly pivot just ahead up at 15244, but after that, there’s really nothing till quite a bit higher. Obviously we will have some new weekly pivots starting tomorrow, but I hardly give those the same consideration as I do the higher timeframe ones. With tech being less extended than the SPY, any dips back to the 20d early on in the week can be used for areas to look for longs on strong tech names. I wouldn’t really be concerned until we lose last week’s lows. If we were to lose last week’s lows, I would be very interested to see if we struggle to retest highs and instead start to show some more signs of weakness.
Bitcoin continues to look extremely strong. We are now retesting the major breakdown area from back in May. But we’ve reclaimed the 200d as well as the weekly 20sma and we are continuing to see higher highs and higher lows. Talk all the shit you want to on the crypto space, but one thing that can’t be denied is how well these names follow technical levels/analysis.
Strength last week was concentrated in the Materials, Consumer Staples, and Financial sectors. Weakness shifted back to the Energy sector. One thing to note is the underperformance of the IT sector. We’ll see if that continues or if they see some money rotate in this week.
Strong Stocks Looking For Continuation
Crazy strong day on Friday with superb volume behind the move. Would love to see a weak open and a retrace to some key levels for early scoops come Monday. Can clearly see the 72.47 monthly pivot right there and if you look at the intraday price action from Friday you can see that level held multiple times. If that level can’t hold, the 61.8% fib level is going to put us down there in that 70 pocket which I also like. One thing I like to point out is where this move stemmed from; the weekly 20sma.
Over 365.78 is the trigger for me and depending on the action, if we trigger I may just look to join trend that day. But if it wants to just stuff after triggering, I will patiently wait for better entries closer to the 20d with the possibility of keeping some on for a swing. Once triggered the target becomes ATHs for the swing. Obviously needs to trigger first, so not trying to get ahead of myself, but remember, preparation is the key.
Quite the daily candle on Friday. Would look for a retrace back to the monthly pivot at 187.56 for scoops. That level lines up nicely with a TON of the recent daily levels.
Oversold Reversion Setups
She’s not there yet, but if Monday this can flush hard down to the ATLs, I think it should offer a decent bounce. Keep in mind, I would prefer it to just slam down there. If it just has a constant grind lower then I would most likely scrap the idea unless I saw some definitive higher lows being put in and giving me the ability to have clear risk. If it were to lose those 26s, the next area I would consider revisiting the idea would be 22-23.
Weak Stocks Looking For Continuation
Starting with the monthly chart here to show you just how major of a short trigger this has just hit. The bigger picture target would be the monthly 20sma if you were to want to swing it. But the r:r is terrible since you wouldn’t be wrong until it were to make new ATHs. So then how do you trade it? Thought you’d never ask!
The first area I will watch would be a retrace back to the monthly pivot at 33.52 which would also be right around a 50% retrace of Friday’s action. I kind of think that level may be a bit too close and would rather see if we can push up into the quarterly pivot at 35.64 which is closer to the most recent breakdown level we had on the daily chart. Make plans for everything though, which means we need to consider that it could actually push up a lot further before finding resistance that is too thick. The 40-42 area is where I would get pretty involved and possibly be looking for entries that allow for the swing idea as well. I think you have much clearer risk using 44 as the over/under level at that point. Keep in mind, it’s highly unlikely to get a push up to those kinds of levels in a single day or even a few. That area would be something for possibly later this week or early next week. Remember, you have to manage risk and be able to acknowledge when the idea is wrong and not working. The plan isn’t to enter at 33.5s and add the whole way up to 42. That’s suicidal. I would much rather take my papercuts on the way up and be ready to attack fresh at each level.
Will be on watch for pops back to the 20d/quarterly pivot area for a fade.
Overbought Reversion Setups
$NUE & $UPST
Neither of these charts are extended enough for me to be excited yet, but I’m throwing them on the watch in the case that they DO get more extreme to the upside without a pullback first. I want to make it VERY CLEAR that both of these charts probably offer great long opps if they retrace back to their recent breakout areas, so in NO WAY am I bearish on either name. If you zoom in on their intraday higher timeframes (30min/60min) you’ll notice that neither are really extended and in fact are trending VERY well. I would need to see that change and things to get much more parabolic before either name has my attention for that high-conviction fade.
Ok, guys, so that is all from me. I know that usually I go into the earnings plays that matter for the week, but moving forward I’m not going to include those because it makes putting these weekly videos/blogposts way too much work. Remember, that doesn’t mean that I’m not preparing for these names. I am. And so should you. But how do you prepare for these upcoming earnings? Glad you asked. I’m leaving you with this parting gift. I have put together a short webinar on how I prepare for these earnings plays. This way you can see exactly what it is that I’m looking for and the thought process that goes into making the plans. All you need to do is click the link and you’ll be taken to the webinar. After that, it will still be up to you to do the WORK. But I have faith in you guys. See you all Monday ready to crush it. Cheers.