DIP, RIP, DIP?
DAILY OUTLOOK
Overall Market Outlook:
Markets are in a consolidation phase, with potential for chop until Friday's monthly/quarterly close.
Not bearish overall, but caution advised due to potential range-bound trading.
Key Levels and Indicators:
ES (S&P 500 futures) moving along the edge of an uptrend channel, with 5515-5520 as buy zone and 5532 as sell zone.
VIX 4-hour 50MA is crucial - if it holds, could lead to market pullback.
SPY daily 9MA and weekly VIX supports are important to watch.
Specific Assets:
NVDA expected to consolidate after recent strong move.
SOXL reached near 58 target, then pulled back as expected.
BTC holding above 61.5k support, seen as positive.
AAPL not concerning unless it drops below 204 monthly breakout level.
AMD consolidating in a wedge pattern on weekly chart.
Trading Strategies:
Avoid getting chopped up in narrow ranges.
Consider using the ES range (5515-5532) as a guide for other trades.
Potential short at 5545 on ES (with stop loss).
TQQQ pulled back at 4-hour wedge resistance as predicted.
Upcoming Considerations:
Preparing for potential July patterns if ES doesn't hold uptrend channel this week.
Call at 11 to review charts and take requests for July outlook.
Technical Analysis Approach:
Emphasis on wedge patterns and moving average interactions.
Using previous patterns to predict potential moves.
The analyst stresses the importance of trusting the analysis while acknowledging that price action is the ultimate determinant. They suggest being prepared for various scenarios while maintaining a generally non-bearish outlook.
WEDNESDAY CALL SUMMARY :
Overall Market Outlook:
Potential for weaker markets in July if this week doesn't show "random strength".
Possibility of choppy markets leading to weakness next week.
Weekly 9MA remains a key level to watch for indices.
Specific Stocks Reviewed:
New charts for MU, ANF, and MRVL were introduced.
Positive outlook for HOOD, AMZN, and TSLA charts.
INTC described as the "Boeing of semis" - likely indicating ongoing challenges.
CCL was also reviewed.
NVDA recap emphasizing the importance of the 116 level and weekly 9MA.
Trading Philosophy:
Emphasis on picking battles wisely.
Importance of capitalizing on favorable market conditions ("make hay when the sun shines").
Looking beyond price to buy at the right time and for better reasons.
Educational Component:
Tips on charting were provided.
Discussion on how to analyze stocks beyond just price action.
Market Sentiment:
Cautious outlook with potential for weakness, but also watching for possible strength due to factors like IPC (likely referring to inflation data).
This summary suggests a comprehensive review of both broad market conditions and specific stock opportunities, coupled with educational content on trading strategies and chart analysis. The mix of macro outlook, specific stock analysis, and trading education provides a well-rounded approach to market analysis.
NVDA ANALYSIS
Certainly. I'll analyze NVIDIA (NVDA) at its current price of 124 across all the time frames you've provided: monthly, weekly, and 4-hour. This multi-timeframe analysis will give us a comprehensive view of NVDA's current market position.
Monthly Timeframe:
Pivots: 88, 122, 166, 227, 274, 311, 430
MAs: 9MA 76, 20MA 32, 50MA 31
1. At 124, NVDA is just above the 122 monthly pivot, suggesting a bullish bias on the longest timeframe.
2. It's well above all monthly MAs, indicating a strong long-term uptrend.
3. Next major resistance is at 166, with 88 as significant support below.
4. The large gap between price and lower MAs (20MA and 50MA) shows exceptional long-term strength but also suggests potential overextension.
Weekly Timeframe:
Pivots: 75.72, 81.88, 95.08, 116.42, 116.22, 189.81
MAs: 9MA 109, 20MA 95, 50MA 67
1. Price is above all weekly MAs and pivots provided, confirming the strong uptrend.
2. The 116.42/116.22 zone now serves as key support.
3. The 9MA at 109 is the next significant support level.
4. There's a large gap to the next provided resistance at 189.81, suggesting room for further upside.
4-Hour Timeframe:
Pivots: 110.86, 116.19, 119.02, 125.37, 126.56, 131.15, 134.88, 137.39, 138.49, 143.03
1. At 124, NVDA is between the 119.02 support and 125.37 resistance.
2. Breaking above 125.37 could trigger a move to 126.56 and potentially higher.
3. Immediate support is at 119.02, with stronger support at 116.19 (aligning with weekly pivots).
Integrated Analysis:
1. Trend Confirmation: All timeframes confirm a strong uptrend, with price above key MAs and recent pivot points.
2. Support Levels (in order of importance):
- 122 (monthly pivot)
- 119.02 (4-hour pivot)
- 116.42/116.22 (weekly pivots)
- 109 (weekly 9MA)
3. Resistance Levels:
- 125.37, 126.56 (immediate 4-hour pivots)
- 131.15, 134.88, 137.39, 138.49, 143.03 (higher 4-hour pivots)
- 166 (next major monthly pivot)
4. Potential Scenarios:
- Bullish: Break above 125.37 could target the cluster of 4-hour pivots up to 143.03, with 166 as a longer-term target.
- Consolidation: Price might oscillate between 119.02 and 125.37 in the short term.
- Bearish: A break below 119.02 could see a test of the crucial 116.42/116.22 zone.
5. Risk Management:
- Long positions might use the 116.42/116.22 area as a key stop-loss zone.
- Short-term trades could use tighter stops below 119.02.
6. Market Position:
- NVDA is in a strong position across all timeframes but may be approaching short-term resistance.
- The stock appears somewhat extended from longer-term moving averages, suggesting caution.
7. Trading Strategy:
- Long-term investors might view pullbacks to the weekly 9MA (109) or monthly pivot (122) as potential buying opportunities.
- Short-term traders could look for breakouts above 125.37 or pullbacks to 119.02 for entries.
- Be cautious of potential consolidation given the extended nature of the move on longer timeframes.
Remember to consider broader market conditions, sector performance, and any upcoming news or events that could impact NVIDIA's stock price. This multi-timeframe analysis provides a comprehensive view, but always be prepared to adjust your strategy as new information or market conditions emerge.
NVDA BACKTESTS
Incorporating the concept of backtests into our multi-timeframe analysis of NVIDIA (NVDA) at $124 can provide additional insights. Backtests refer to the price returning to a previously broken level of support or resistance to test it from the other side. Here's how we can incorporate this idea:
Monthly Timeframe:
1. The 122 monthly pivot is a key level to watch for a backtest. NVDA has just broken above this level, so a pullback to 122 could be seen as a bullish backtest if it holds as support.
2. A more significant backtest would be to the 88 level, which could align with the monthly 9MA (76) in the future.
Weekly Timeframe:
1. The 116.42/116.22 zone is crucial. A pullback to this area would represent a backtest of the recent breakout and could provide a strong buying opportunity if it holds.
2. The weekly 9MA at 109 could also be a backtest target. Price often pulls back to test this moving average in strong uptrends.
4-Hour Timeframe:
1. The 119.02 level, having been recently broken to the upside, is now a potential backtest level. A pullback to this area that holds as support could be a good short-term entry point.
2. Similarly, if price breaks above 125.37, a subsequent pullback to this level could be viewed as a bullish backtest.
Integrated Backtest Analysis:
1. Near-term Backtest Levels:
- 122 (monthly pivot)
- 119.02 (4-hour pivot)
These levels are close to the current price and could see backtests in the short term.
2. Medium-term Backtest Levels:
- 116.42/116.22 (weekly pivots)
- 109 (weekly 9MA)
These could be targets for more significant pullbacks and might offer stronger buying opportunities.
3. Long-term Backtest Levels:
- 88 (monthly pivot)
- 76 (monthly 9MA)
These would represent major pullbacks and could be seen as significant buying opportunities if reached.
4. Backtest Strategy:
- For bullish continuation trades, wait for a pullback (backtest) to a key level and look for signs of support (like a reversal candlestick pattern) before entering.
- Use the level being tested as a close stop-loss point.
5. Backtest Scenarios:
- Shallow Backtest: A pullback to 122 or 119.02 that holds could lead to a quick resumption of the uptrend.
- Moderate Backtest: A deeper pullback to the 116.42/116.22 area or the weekly 9MA at 109 could offer a more significant buying opportunity.
- Deep Backtest: A major pullback to 88 or lower would test the overall trend but could offer a substantial long-term entry if it holds.
6. Failed Backtests:
- If price pulls back to a level (e.g., 119.02) but fails to hold it as support, it could indicate weakness and a potential deeper pullback.
- A failed backtest of the 116.42/116.22 zone could signal a more significant trend change.
7. Combining Backtests with Other Indicators:
- Look for confluence with other technical indicators (like RSI oversold conditions) at backtest levels for stronger signals.
- Volume increase on successful backtests can confirm the level's significance.
8. Risk Management with Backtests:
- Enter trades as close to the backtest level as possible to minimize risk.
- If a backtest fails (price breaks below the tested level), it often does so quickly, allowing for tight stop losses.
By incorporating backtests into our analysis, we get a more dynamic view of potential price movements. This approach allows for more precise entry points and clearer invalidation levels for trades. Remember, successful backtests often provide the highest probability setups in trending markets.
VIX ANALYSIS AT CLOSE
1. 4-Hour Timeframe:
- VIX is trading above the 13.71 pivot but below the 14.64 pivot
- It's below all 4-hour MAs (9MA: 14.1236, 20MA: 14.46, 50MA: 14.27), indicating short-term declining volatility
2. Daily Timeframe:
- Trading between the 13.67 and 14.09 pivots
- Just above the 9MA (13.8071) and 20MA (13.515), but below 50MA (14.0367)
3. Weekly Timeframe:
- Between the 12.36 and 14.11 pivots
- Slightly above the 9MA (13.7), but below 20MA (14.5) and 50MA (15.21)
4. Monthly Timeframe:
- Just above the 13.65 pivot
- Below all monthly MAs, confirming lower long-term volatility
Key Observations:
1. The VIX at 13.93 suggests relatively low market volatility, especially compared to longer-term averages.
2. It's in a neutral zone on most timeframes, not signalling extreme complacency nor fear.
3. The level is close to several pivots and MAs, indicating a potential decision point for market volatility.
Market Implications:
1. The current VIX level suggests a calm market with potential for steady upward movement in equities.
2. However, being close to several technical levels means it could easily swing in either direction.