The Current Market Context
NASDAQ On Uptrend Retest #3
Yesterday, the market continued to rally and has now gone up all the way to test the top of its long term wedge trendline.
In the process of doing so, it has created strong 4h demand near the top of the trendline AND surpassed a strong whole number key level in 15,000. The prior tests of this trendline failed to base and create this level of demand support before their attempts. With that said, thats as good of a breakout setup as we can hope for. It should be on watch for a continuation rally today.
However, S&P 500 is Over-Extended...
SPY firmly broke out of its long term trendline, but did not create the same level of demand support
its key level as NASDAQ did.
It did pass a strong key level in 4400, so if /NQ holds up, I could see SPY following suit with a drop below demand for a bear trap with a further rally up after testing it.
The key thing to watch today is the first hour of the trading session.
We want to see a few things in order:
If the market begins with a rally or drop
– if a drop, we want to see if it can test and hold above 4h demand and key levels. That would indicate a further rally on the day. If a rally, we want to see how it reacts at the above supply zones. If a strong reaction, the stock will likely drop substantially today to correct itself from yesterday’s rally (S&P 500) and stay within its zone (NASDAQ).
If the market bases within supply zone
- if at any point in the day SPY rallies and bases within supply, thats an indicator of a journey toward ATH soon. at that point...calls only.
If the market drops and stays below their key levels
- thats a clear indicator of a correction downward back into long term downtrend, especially on NASDAQ
Plays of the Day
QQQ from $368 - $372+
If NASDAQ manages to break out from its long-term downtrend today, it will do so with force.
I could easily see the market balancing and testing demand early within the day, but if at any time there is a breakout with volume and volatility, it’s worth taking the shot at the big win.
Look to get in on calls when intraday demand forms at 4h demand zone, at VWAP, or at key levels if it drops that far.
There’s a long way down before you can safely consider playing puts.
QQQ 2 OTM Call (3 day exp)
QQQ 2 OTM Call (3 day exp)
🔥 Lotto Friday Exclusive
– NVDA from $217 to $222 - $224
Yesterday in premarket I predicted a possible rally to $217, which was confirmed in yesterdays trading session. Now, we are looking for a continuation/completion of that move to test its current long termn resistance area at $224.
NASDAQ rally set up positive sentiment for this move to gain hype and continue, plus it caught great volume yesterday so it will be on a lot of trader’s watchlist.
If NASDAQ is strong again today, look for the hold of $217 and intraday demand volume to appear. Then and only then, ride the wave upward for a Lotto Friday big bag!
NVDA 220 Call (0-day exp)
NVDA 217.5 Call (0-day exp)