Software IS BACK! Setups Proliferate Into PCE
Tech surges - All eyes on a huge PCE report.
Key takeaway: Always be ready for anything — prepare a battle plan for bullish and bearish scenarios.
So much for a tech selloff!
Overnight tech fears flipped into pure excitement today as the market shrugged off Nvidia earnings and roared higher — powered by an explosive comeback in the software sector.
Software stocks are back in business!
What was shaping up to be a risk-off scenario turned into a big expectation breaker, with money flooding straight back into technology and igniting a surge across the board.
An explosive day that saw the resurgence of Software, Cyber & quantum—a phenomenal twist in the market.
Just last night we talked about the potential for a sharp reversal, and that’s exactly what unfolded.
The fascinating part?
While all eyes were glued to Nvidia’s earnings, many of its peers in the group actually delivered bigger gains than Nvidia itself — a sign of healthy rotation and a market that wants to keep tech in play.
Now, all eyes pivot to tomorrow morning’s PCE report — the Fed’s preferred inflation gauge.
With the way money is flowing, conditions are primed for upside.
The huge risk to all of this?A hot PCE report tomorrow that could really shake things up.
In the Trading Room, Our NET and GEV positions made fantastic progress, and with software stepping back into a leadership role, that’s where I want to be leaning in right now.
Tonight, I’ll look at:
Big list of actionable ideas, if we follow-through
TNA, GEV, NET positions see traction
Tech back in gear!
Indexes all rocking - levels, analysis
Market Breadth update - health remains
Portfolio review
Video & chart analysis!
Let’s dive in!
QQQ
QQQ saw a fantastic breakout through the recent consolidation range and looks set to come up and challenge the previous all-time high.
I referenced the really clean setup yesterday; however, NVDA earnings prohibited me from taking on that risk.
That is what is called discipline, and sometimes it's going to mean that you have to pass on what could be a good potential opportunity.
The professional trader will always think first. We have held the moving averages really well and bounced nicely from them, so for now we must continue to lean bullish.
SPY
SPY saw some fantastic follow-through today as it once again makes a new all-time high and is trading out into blue sky territory.
Yesterday we saw the breakout move, and today we got the follow-through that we were looking to see.
The trend is up and we are above all moving averages, so there is nothing to think about here except following the trend.
A very nice-looking chart with no resistance above to contend with.
IWM
IWM was the quieter performing index today but still looks extremely constructive here.
It is holding and trading above its rising five SMA which tells me that momentum is very strong.
As we've discussed, there's a chance that we see momentum continue all the way to the 245 level, or perhaps we see the run-up remain until the next Fed meeting.
I'd be more than happy to see this rotation take place between tech and small caps.
What I love about our TNA position is the fact that there are no earnings reports to contend with, so we really can position and sit for a big move if the market wishes to provide it.
ARKK
ARKK held in very nicely at the moving averages and is looking absolutely coiled to make a breakout move here.
It is testing the downtrend line whilst maintaining some very tight and orderly price action, not to mention the volume is drying up incredibly well, with all signs pointing to a breakout move on the cards here.
The nice thing about an ETF like this is there is less individual stock risk. I will be watching this very closely tomorrow for a possible entry.
Gold
Gold had a great day today as it continues to turn and run straight back up into the prior high area.
It has been building a long weekly base for a number of months now and the weekly chart is what is most attractive to me.
As discussed, what I'm looking for now is some sort of tight consolidation or light pullback after tapping prior high resistance—that would be the setup spot.
Bitcoin/ETH (long ETH)
Bitcoin continues to do battle at the major 112K area, which is setting up some interesting price action.
As we can see, price tried to come up and test the 10 EMA but saw rejection—a common occurrence when a stock runs into declining moving averages.
I remained an observer and will wait for a setup to develop in Bitcoin.
Ethereum pulled back a little bit today and is battling to hold onto its 10-day moving average.
My line in the sand, and what I'm using to manage the position, is going to be the 21 EMA, so as long as we hold above that level, I am going to lean bullish and simply let my trade play out.
ETH:
USD
The dollar is now slipping decisively below the 50-day moving average and could be heading towards a test of support. It will be interesting to see how it handles that area.
TNX
The 10-year yield continues to roll over as it looks to test the key level, a support area that was tested in early July and early August.
The breakdown here points to potentially further weakness.
Our market indicator
Remains on a GREEN signal.
Holding very nicely here as we see internals acting very well. Hard not to imagine a test of the recent highs incoming.
Quallmaggie indicator
Our Quallmaggie indicator remains RISK ON.
The QQQ is charging towards the prior high and we have price trading above stacked rising moving averages, keeping us nicely on a risk-on signal.
With software returning to the arena in a big way today, I believe we are going to see more strength in tech.
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