A look at the PROS and CONS of this current market, what I want to see next

Flexibility key here, as leaders lead- but indexes look shakier

Key takeaway: Be mindful of the indexes, but FOCUS MORESO on the leaders.

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I am back tonight from a family road trip to DC for a FIFA Club World Cup game, apologies for the later newsletter tonight team.

—Now it’s head down, and back to work! Let’s do it!

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We’re seeing a little bifurcation between the indexes and leading stocks.

Wednesday brought explosive moves in crypto-related names, yet the indexes again failed to reclaim the 10-day EMA.

Distribution days are adding up, especially in the SPY.

Does it matter if leaders keep working? We will monitor that closely, but I will remain engaged as long as leaders HOLD.

For now, price action remains orderly in many setups and multiple sectors look positive, but I’m staying nimble.

The FOMC statement revealed little, but volatility was abundant. Maybe the real moves comes tomorrow, with OPEX on deck!

Middle East tensions remain, and headline risk is prevalent…and tomorrow we have TRIPLE WITCHING OPEX… buckle up!

Tonight, I’ll look at:

• The good, the bad, the ugly of this market

• Key levels for the indexes

• Actionable trade ideas

• What concerns me about this market

• New position added and WHY

• Market Breadth, Internals

• Hot themes, Portfolio review

Let’s dive in!

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QQQ

QQQ continues to show vulnerability, unable to hold above the 10-day EMA.

While we haven’t seen a significant breakdown recently, a potential lower high or rounding top formation is a concern.

A rising wedge pattern may also be breaking down.

HOWEVER as noted earlier this week, a test of the 21-day EMA would be normal after the recent rally - and quite bullish.

Since 75% of stocks move with the indexes, we must stay mindful of a potential short-term market breakdown.

SPY

SPY closed below the 10-day EMA for the second consecutive day, and early futures trading suggests a small gap down tomorrow.

I’m watching for a potential flush to the 21-day EMA.

There’s nothing wrong with testing this level, but with distribution days piling up, as mentioned last week, the market may start to react. We’ll take it day by day.

IWM

IWM showed relative strength yesterday, holding the 21-day EMA support.

This level is critical for consolidation. Price attempted to reclaim the 10-day EMA but was rejected, making Wednesday’s high a pivotal level in the coming days.

ARKK

ARKK displayed impressive strength, continuing its breakaway run.

The ETF holds high-octane stocks like COIN and CRCL, which were standout performers on Wednesday.

I’m closely watching ARKK for a buy opportunity on any pullback or consolidation, as it looks poised for a potential Stage 2 advance.

Gold

Gold is digesting its breakout, flagging back to the 21-day EMA. It’s worth watching whether it finds support and turns higher or drops below the moving averages.

Taking out today’s high would be a bullish signal.

Bitcoin (long)

Bitcoin attempted a breakout above short-term moving averages but failed and now risks slipping below the 50-day moving average.

Price action has turned slightly more volatile and erratic, causing some sharp swings.

Tuesday’s low is a key level; a breach could drive prices back to last week’s low, triggering stop losses. The market will decide the next move.

USD

The dollar is attempting a trend reversal, testing the 21-day EMA. A close above this level would confirm the change. I’m watching closely.

TNX

The 10-year yield remains quiet, trading under a descending trendline.

It’s not doing much for now, but a breakout above the trendline would be noteworthy.

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Our market indicator

Remains on a YELLOW signal.

Let’s see if we can recover the 10EMA and push higher.

Note the put to call ratio has jumped significantly…fear entering this market it seems?

Qullamaggie indicator

Our Qullamaggie indicator flips quickly back to RISK OFF.

We want to see that 10EMA reclaimed shortly.

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