High-and-Tight Range Set | Trading MU, ABBV, CSCO, FUBO

It's been a slow couple of days, so good thing we kept our foot off the gas.

Technical Breakdown 

• NYSE Breadth: 40.7% upside volume

• NASDAQ Breadth: 36.5% upside volume 

Wednesday’s breadth numbers were nearly identical to Tuesday’s results. When we look at the charts, you’ll see why. 

I called Tuesday a “no-day” yesterday and with Wednesday’s action, we could call it one too. We’re in a slow period with the year-end trade in full force. Because we don’t have a short trading week for the New Year, the markets will be open for the next two days. However, that doesn’t mean volume will pick up meaningfully. 

Below is the S&P 500 and S&P Futures. If a chart is worth 1,000 words, these do a wonderful job illustrating just how tight (and slow) the action has been. 

S&P 500

SPY 4H and SPY Daily

Clearing $478.60 would give us a daily-up in the SPY. However, over $478.80 clears this week’s high and could put a larger breakout in play. 

If we get a break of the two-day low at ~$475.90, it could open the door for a test of the 10-day moving average (first on the 4-hour chart, then potentially on the daily). 

Given the low volume though, it wouldn’t be crazy to think we have a “thin to win” situation on our hands with a breakout over this week’s high and a slow grind higher. 

For that to happen though, we need to clear ~$479 and hold that level. 

ES

S&P futures | Daily

This is what it looks like for the ES futures, with the level to clear up at 4798.  

Individual Stocks

I would love a situation where the S&P gives us a bit more range to work with. Ideally I’d like to settle into a position and let it run through the day.

I don’t know that that happens, though. 

As far as individual stocks go, this has been a very quiet week for us. We had some early success with AMD and some cash-flow opportunities with AVGO and TSLA, but otherwise we’re waiting for a number of stocks to reset after a nice run. 

During this period of waiting for a reset it’s important not to force trades. That is where many traders give up their hard-earned gains from the prior rallies. Knowing when not to trade is as important as knowing when to trade. 

For me, the “reset list” contains a lot of our recent winners and some additional ones as well. Names like PG, UNH, ABBV, ZTS, CSCO and others. A few of those find their way on today’s list too.