Gap up? Get ready to use the opening range breakout setup tomorrow

Monster recovery keeps the rally alive - setups list expands

A weak market open proved to be a bear trap, as contracting GDP numbers failed to deter bulls who staged an extraordinary comeback rally.

Signs of recovery were evident as leading stocks swiftly rebounded from morning weakness.

Our PLTR shot up straight from the lows and never looked back.

The powerful action continued after hours, with positive reactions to MSFT and META earnings fuelling further gains in extended trading.

I am excited about potentially using some opening range breakouts to get some exposure on tomorrow.

Tomorrow, we look to be gapping up and clearing the 50-day SMA for the first time in MONTHS.

Can it hold?

Let’s break down our plan for what could be another big rally day.

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QQQ

QQQ displayed remarkably bullish price action, powerfully recovering from an ugly morning selloff.

What seemed like an overdue pullback was thwarted as price tested the 10- and 21-day EMAs, where strong support triggered exceptional buying and a robust rally.

Earnings are adding more firepower tonight, and all eyes are on tomorrow to see if we can decisively hold this gap through the 50-day SMA.

Sustaining this breakout could clear the path to the 200-day SMA. The rally is extended but shows no signs of slowing.

SPY

SPY also experienced a tremendous shakeout, finding support at the 10- and 21-day EMAs and launching.

Notably, the after-hours gap-up suggests it will open near the 50-day SMA.

The outcome at this key level will be critical. Whether we see a rejection or a breakout is uncertain, but the bulls are in control and running hot. The 200-day SMA looms above.

IWM

IWM has been the weakest of the three indexes, impacted more by tariffs on smaller companies.

It remains far from testing its 50-day moving average, and it's no surprise that tech names are leading this rally, driving strength in QQQ.

We haven't focused on small caps for some time, and that stance will continue. Our goal is to always target the highest relative strength areas of the market.

Gold

Gold is finally showing weakness, slipping below the 10-day EMA and threatening to lose the 3274 level.

Its incredible run now appears vulnerable, and as it pulls back, price action in the broader market has improved significantly, with capital flowing back to risk-on assets.

Gold may find support at the 21-day EMA.

Bitcoin (long)

Bitcoin continues to trade exceptionally well, forming a strong continuation pattern. Our long position is performing nicely, consolidating after a clean breakout.

I’m looking to add to this swing position, as we’re on the cusp of a compelling setup. We’ll remain patient, waiting for the pivot to trigger before increasing exposure.

USD

The dollar gained strength today, testing the 10-day EMA. This level has been stiff resistance during its decline, and a breakout here could target the 21-day EMA above.

TNX

Yields continued to decline today, aligning with the trend of weaker yields and stronger equity performance.

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Our market indicator

Remains on a YELLOW signal.

The weak open likely lead to the net lows reading, but the response that came is what counts. Let’s see if we can snap back to green tomorrow with a big rally!

Qullamaggie indicator

Our Qullamaggie indicator remains RISK ON.

Yesterday’s shift to green and risk-on was followed by fantastic price action today, with a brilliant recovery from the morning gap-down.

Let’s see if this trend can build and deliver a sustained run.

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SKFD

Breadth readings pulled back slightly but remain elevated, and price action is still robust. We’re still missing a proper digestion or pullback.

NCFD

A modest retreat to neutral readings, but as noted, most stocks and indexes are quite extended.

NASI

We remain on a BUY signal.

This bullish signal was a powerful harbinger of strength and continues to support a risk-on environment.

FINVIZ market snapshot

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