Bulls throw a counter punch - all eyes on tomorrow
Markets make a stand - will a potentially hot PCE number break us lower, or can GOOG earnings lift all boats?
A nasty gap down this morning led to a buying frenzy that saw lots of strong moves off the lows.
Volatility remains extremely elevated and positioning into leading names remains challenging. I am looking to remain patient and for the fat pitch. Indexes are below all moving averages - you haven’t missed anything yet.
Tomorrow morning we have PCE data pre-market - big tech earnings are lifting the market after hours, but there’s no telling how we will react to the data.
Tonight we’ll review our refresh ideas an watchlist for an action-packed Friday!
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Today’s newsletter
Index review
Market timing indicator
Watchlist/trade ideas
Portfolio review
1. Indexes update
QQQ - This index gapped down lower only to see strong buying throughout the whole day. There is so much work to be done as we are not even above the 10-day moving average. But this type of action is a positive response.
IWM - This index followed with similar price action, putting in a nice hammer style candle. Let's see what happens tomorrow.
SPY - Again, this index is below its 10 day moving average also. There is a tremendous amount of work to be done with all indexes, so there is so much time to get invested here.
Gold
I like the digestion on the 21ema that we are seeing in gold. It has the gap to fill, but looks very interesting.
2. Trade ideas-Watchlist-System Signal
Just when everything looked bleak, the market put in a strong reversal intraday.
I have no idea where we go from here with big macro data in the morning, but it is important to stay ready at all times. And that is exactly what we will do.
Let's go over a refreshed list of leaders in the market and plans for possible positions tomorrow if we get a ‘Follow through day’ type of move in the market.
TRADE IDEAS - Note, that all entries are marked on the chart (green line) and stop losses are low of day OR the prior day’s low, unless written otherwise. Please feel free to use discretion and use whatever stop-risk level you are comfortable with. Most of the time, I use the low of day (0-1.5% stops typically).
CAVA
Setup: Trendline breakout
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