Pullback incoming? This is what I am doing to prepare...

My Market Indicator is flashing some signs for warning, but letting positions work!

Finally, we saw a few of the elite names digesting after remarkable upward moves.

Many names kept running though, like our TSLA position, out to a 17% gain in just a few days.

Long last Friday, entry shared in the Trading Room:

Pullbacks and consolidation are normal after significant rallies, providing the foundation for new setups to emerge.

I’m encouraged by this week’s action, and my watchlist grows daily.

If the market digests well and breakouts resolve higher, countless stock opportunities await us— I am very excited about the potential.

We are approaching resistance and are VERY extended, so it’s defence first. A huge morning awaits us with PPI, Jobless claims and retail sales numbers.

First, let’s navigate tomorrow’s critical macro data releases and take it one day at a time.

Let’s go

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• Check out my interview with Christian Flanders from last week! Lots of great insights from Christian on the trading year so far.

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QQQ

QQQ advanced today, but the action felt more like a rest day, typical of a trend nearing a potential pause after a strong run.

My strategy is to let this trend play out and prepare myself for a pullback, holding our stocks and allowing them to perform if the market pushes higher.

I anticipate resistance at prior all-time highs, and the reaction there will signal what’s next. The 10 EMA is stretched vertically.

I’m focusing on letting the market consolidate before adding new exposure.

SPY

SPY also posted a constructive rest day, trading within yesterday’s candle.

Like QQQ, it’s extended and needs time for basing and consolidation.

I’m staying flexible, as strength could persist longer than expected, or weakness could emerge, testing the moving averages below to shake out late-chasing traders.

As long as SPY holds the 10 and 21 EMAs, the uptrend remains intact.

IWM

IWM is consolidating, with today’s orderly pullback on light volume. A dip to test the rising moving averages would be healthy.

As noted recently, this index continues to underperform its peers and isn’t currently our focus. My priority remains liquid, leading names in tech.

Gold

Gold pulled back further, now decisively testing the 10-week moving average.

It’s been off our radar for long positions due to short-term topping signals. A break below the 50-day moving average wouldn’t surprise me.

Bitcoin (long)

Bitcoin is digesting impeccably, posting a double inside day above the rising moving averages. GET READY TO BUY if you are not yet long.

This normal rest allows price to absorb supply from prior all-time highs.

As long as Bitcoin remains tight and holds the moving averages, I’m optimistic about a potential breakout to new highs.

We’re risk-managing our positions and will hold as long as it stays above the 21 EMA.

USD

The dollar shook out below short-term moving averages before forming a hammer candle and closing near the day’s high. It remains in a challenging position, caught between the 50-day moving average and the 21 EMA.

TNX

Yields continue to climb, which could pose a problem for markets. The last time yields reached this level, trade tensions eased.

Now, with deals progressing, yields aren’t retreating. I’m uncertain about the next move, but this chart demands attention.

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Our market indicator

Remains on a GREEN signal

We have now closed above the upper keltner band, and we are seeing a RED signal flash in the put-to-call indicator — these two signs are telling me there is a decent chance for some short-term digestion.

Qullamaggie indicator

Our Qullamaggie indicator remains RISK ON.

The market remains on a buy signal, trending higher above rising moving averages. These indicators are valuable for timing healthier market environments, reinforcing their importance.

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SKFD

As expected, we saw a slight pullback, but the market remains heavily extended. I’m looking for further consolidation ahead.

NCFD

The market is easing toward neutral levels, a healthy and necessary move after the recent rally.