Is This a Big "Dead-Cat Bounce" or a Change in Tune Trend Shift?
It's still not clear with many stocks still in downtrends
Technical Edge —
NYSE Breadth: 76.3% Upside Volume
NASDAQ Breadth: 82% Upside Volume (!)
While we had a back-to-back day with 80%+ upside volume on the Nasdaq, we couldn’t quite get there on the NYSE. Despite the S&P rallying 5.8% in the last three days (up 2.2%, 2.23% and 1.25%), we only got one day with an 80%+ upside volume day.
It was good seeing some prior tech leaders — AAPL, NVDA, TSLA, AMZN, etc. — hold some key levels and/or clear active resistance.
There are definitely some improvements out there, but we’re not waving the “all clear” flag just yet. Specifically, many stocks are still mired in deep downtrends and are below resistance.
Game Plan
This was a pretty good week, so we are keeping the Game Plan short today.
We were able to hit a couple of nice cash flow trades early in the week, while waiting for a possible “sell the rumor, buy the news” reaction to the Fed. We got it and now we see how the rally plays out.
Our XLE trade worked flawlessly on Thursday, with the next price target noted below.
S&P 500 — ES
We are back to a key area on the chart. Not only was 4400-4420 resistance earlier this month, but bulls also face the 50-week and 10-week moving averages, as well as the 61.8% retracement.
This creates both opportunity and risk.
The risk is clear — if the ES fails here, it could roll over. However, the opportunity is grand, which comes if the ES can clear all of these measures.
**Just go level to level. For example, if the ES clears 4407, it puts ~4418 in play. If it breaks below 4353, it puts 4320 in play.**
Upside levels to watch:
4406.75 — Thursday’s high
4418 — March high
50-day
4460 & the 200-day
Downside levels to watch:
4353 and Daily VWAP
4320 — Thursday’s low
10-day and 21-day moving averages
4260 to 4268
Nasdaq — NQ
Feel free to extrapolate this layout to the QQQ.
Solid Thursday, but I’m watching the same “big theme” areas as yesterday. If bulls maintain strength I want to see 14,375 and the 50-day. Below 13,750 creates a problem.
Upside levels to watch:
14,150
14,375
50-day
Downside levels to watch:
13,820
13,760 (losing 10-day and 21-day)
13,540
Individual Stocks
XLE — Trimmed at $73.55. B/E stop now and look for $75 for next trim spot.
NVDA — Cleared 61.8% retracement, 50-day and downtrend resistance (chart in yesterday’s Plan). Now see if it maintains above these marks, putting $265 in play.
Crude
Needs to get up through the 10-day and 21-day, otherwise risks another test of the $94 to $95 area and the 50-day.
EXPE
Back over all major MAs and major level at ~$188 (2021 high).
After an inside day, I’m now looking for an inside-and-up rotation over $193 to put EXPE over the 61.8% retracement and Thursday's high.
Go-To Watch List
*Feel free to build your own trades off these relative strength leaders*
Numbered are the ones I’m watching most closely. Please look at these closely.
MKC — same setup as yesterday. Watching $99
TU — Now up through the 10-day. Looking to trim ½ at $26 again.
BMY — Trimmed ⅓ to ½ here. Look for $73.50 to $75 next.
BRK.B — Hit $342 trim spot. Another trim at $350.
VRTX — Trimmed ⅓ at/near $250. $254-$255 next trim spot (small).
TECK
CCK
Energy —XLE, APA, CNQ, CVX, ENB
ABBV
ADM
CHKP
AR
COST — looking for $565
DLTR
Economic Outlook
