Trusting moving averages: The key to riding your winners
Markets climb the 'wall of worry' - are all-time highs on deck this week?
Key take-away: Follow your pre-determined plan, trust those averages. not your impulsive, emotional one!
Markets continue to climb the wall of worry—once again proving why we trust our plan over our emotions.
SO MANY sectors are looking hot. Software, semis, cyber, nuclear, quantum…..
Thursday’s drama was merely a blip it seems, as indexes hit new highs on the rally.
Our positions made great progress, lead by HOOD. In the Trading Room, we used some of that strength to trim.
Lots of ideas brewing! Here’s one from our long list: CLS, with a nice flat pivot setup.
While a few stocks saw turbulence, several leaders continue to shine.
Next week promises to be intriguing as the market navigates both CPI and PPI data.
Let’s dive and go over:
Setups for Monday
Indexes and levels
Market breadth & internals
Hot themes
New watchlist
Hot themes
* Don’t forget to watch the video— it’s where you’ll see me talk in depth about the newsletter content & analyse charts, a more deeper educational insight.
Let’s go!
QQQ
QQQ had a stellar week, decisively clearing the key 527 resistance level.
The index continues to find support on its moving averages, trending above the rising 5-day SMA—a powerful sign of strength.
It’s time to stay alert for resistance overhead that could soon come into play. This level looks like a magnet, and if prices reach it, I expect some digestion, as is typical.
We’ll react to the market’s moves and avoid being swayed by our own predictions.
The 65-minute chart:
SPY
SPY had a strong week, breaking out early through the descending trendline.
It’s now pushing to clear the key 600 level, setting the stage to test all-time highs.
That target is still some distance away, so I wouldn’t be surprised by a few shakes or pullbacks along the way.
Despite some volatility, the index is climbing above rising moving averages, which is all we can ask for.
IWM
IWM posted a solid week, edging closer to testing the 200-day moving average.
It finally broke above the 210 level, and the next challenge is the 200-day mark.
I’m not predicting what happens there, but a pullback at that level wouldn’t surprise me.
Gold
Gold faced significant volatility this week after a failed trendline breakout.
It seemed poised for a run to the next resistance area, but instead, it’s now retesting the trendline and finding support at the 21-day EMA.
I’ve avoided trading gold for now and will wait to see how it develops.
Bitcoin (long)
We closed out our bitcoin positions with two nicely profitable trades.
Bitcoin is now finding support at the rising 50-day moving average, and I’m closely watching for a potential re-entry.
A clean trendline breakout through the moving averages could prompt me to add a new position.
There’s slight resistance around 105,000, so that’s a level to monitor.
USD
The dollar mostly consolidated this week, continuing to find support at the April lows.
TNX
The 10-year yield pulled back to support before surging higher on Friday.
I’ll be closely watching to see if this momentum builds after a strong weekly close.
Our market indicator
Flips back to a GREEN signal.
A nice expansion of net highs today which is a welcome sight after a volatile Thursday. As long as we hold yellow/green, we’re in good health.
Qullamaggie indicator
Our Qullamaggie indicator remain RISK ON.
Our risk-on indicator remains intact, and the best price action typically unfolds against with a green backdrop.
Top stocks and indexes trend above rising, stacked moving averages.
SKFD
We’re back at extended levels, with a reading just under 90. Stocks may need a few days to cool off here.
NCFD
A strong push higher capped the week, and we’re heading toward prior highs. There’s still some room for upside.
NASI
Remains on a BUY signal.
It’s been a very choppy week. Looking to see if we can get the buy signal to be sustained.
FINVIZ market snapshot
1 week performance heat map
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