Hi there,
An amazing week where on Thursday the markets decided that everything was rosy in the garden after all, and the bearish pullback/consolidations suddenly turned into bullish gap ups, many above important Key Levels!
That’s the craziness of current conditions, but while all that is going on, our third Master Key of trading really came to the fore, showing its value.
This time last week – and pretty much until Thursday – the most plausible viewpoint was that the market was pulling back and consolidating in anticipation of more downside.
But here’s where our E.D.G.E trade plan did its fine work.
First, we’re only interested in neat setups. And second, they have to actually confirm with a breakout.
Hardly anything broke to the downside meaning “No breakout, no losses”.
Remember, our Three Master Keys… (1) Market Timing, (2) Stock Selection, (3) Trade Plan… Each has an important purpose.
Remember also from last week:
“In time things will settle around the areas of higher probability technical levels, giving us the prime opportunities that we like best.”
Market Outlook
Watch the video at the foot of this email for more detail.
Our Market Timing from last weekend was working out fine until Thursday’s gap-up. And even if I’d given an update on Wednesday, I wouldn’t have predicted what happened the following day.
This sort of behaviour typically does have a follow-through, especially in the context of a post-earnings afterglow. And with so many stocks newly breaching important Key Levels, we are compelled to be on standby for tradeable setups. That means we do need consolidations as well.
This is where things might not be so easy as there’s every chance of continued raggedness. But let’s not pre-judge. If setups occur, then we’re obliged to consider them – in the context of the broader market sentiment and conditions of course.
Our market timing continues to be outstanding. Being good at market timing enables you to swim WITH the tide at the right time.
The Main Indices
Superb upwardly mobile price action for all four main indices. Broader OVI participation would be helpful, along with a consolidation above the newly breached Key Levels.
Market Timers
- Longer Term Market Timer (OVIs): Green.
- Medium Term Swing Timer: Bullish.
- Index OVIs: Only the QQQ’s OVI has turned decisively blue. The others are lagging somewhat.
Fast Filters Stock Selection
With so much momentum on display, this week I’ve gone through more of my Fast Filter combinations than usual. Quality consolidations are scarce, but they’re exactly what I want to find in the coming days.
Pick your playbook and stick to the best quality setups that conform to it.
My playbook is OVI, near Key Levels, Shrinking Retracements, and a consolidation/sideways move. The other two Big Money Footprints are desirable but those four are essential to ME!
Watch the video for this week’s full analysis.
Video analysis
Remember, you can play the video at 1.25x or 1.5x speed if you want to save time! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.
