Category: Uncategorized

MarketSmith powers the charts in this video.

The tiny dip in mega caps was bought again. AMD and AAPL broke out. AMZN and TSLA are setting up for a potential breakout. NFLX might be ready to bounce if it clears 456-457. We saw Paramount and Warner Brothers rallying on Friday, so some of that momentum might impact Netflix as well early next week. MSFT is trying to bounce near its rising 20-day EMA. GOOGL had a huge day last Thursday after they revealed a video with the capabilities of their AI platform Gemini. Then it gave back some of its gains the next day on reports that some of the results might have been manipulated. We will know more next week. NVDA also bounced and it is back above its 20-day EMA. Going back above 480 will open a path for a test of 500. Above 505, it might attempt a run for 550.

Speculative, highly-shorted stocks remain the biggest movers. This is likely to remain the theme for the remainder of the year and early next year, as long as small caps continue to recover. Just look at the recent moves in AAOI, AFRM, IONQ, UPST. I highlighted those stocks at the very beginning of their 50-100% moves. CVNA has a short squeeze potential for the next week. Also, AEHR, IONQ, etc.

Let’s not forget there’s an FOMC meeting on Wednesday. The last one on Nov 1st kicked-started a huge rally. I wonder if this time, Powell will try to cool down market expectations about interest rate cuts next year. As always, what matters in the short-term is the market reaction; not the news.

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MarketSmith powers the charts in this video.

Stock prices change when expectations change. The market expectations for interest rates have changed drastically over the past month. This is why we have seen such a tremendous rally in many stocks. The most sensitive to interest rate changes groups are the best performers since October lows – software, biotech, regional banks, biotech, etc.

The move in software and Internet stocks hasn’t been based on dreams and anticipations for a better future. Almost every major software company that reported earnings this quarter, crushed estimates and raised guidance. Most of them also gapped up and continued higher as a result. Just from last week, we saw that in ESTC, PATH, SNOW, ZS, CRWD, WDAY, etc. The software space has been extremely hot.

Small caps finally broke out above their 200-day moving average and all hell broke loose. Stocks with high short interest squeezed higher – UPST, AFRM, AAOI, COIN among many others. The speculative frenzy is on. FOMO is back in full force. I hope you have been able to participate properly. 

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Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.

MarketSmith powers the charts in this video.

QQQ and SPY broke out from a tight-range consolidation but they didn’t go very far as both are extended in the short-term perspective. Consolidations happen when buyers don’t want to chase the current prices but are willing to buy the quick 3-5% dips. Typically those types of consolidations resolve higher. 

The small-cap index, Russell 2k is consolidating in a tight range right below its 200-day moving average. If it finally breaks out and starts trading above its 200dma, we are likely to see many faster movers among the more speculative, highly-shorted stocks like LMND, AFRM, CVNA, IOT, etc.

Nvidia crushed earnings estimates and raised guidance again. It didn’t break out on the news because it was already up 25% in the three weeks preceding the report. It could test 475-450 before it attempts to break out above 500-510 again.

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Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

I published a new trading book recently (2023). Check it out on Amazon.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.