Category Archives for "Free Content"

An index trade that worked as planned and a $NFLX trade that was postponed until Thursday

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Following two days of selling, the S&P 500 came roaring back Wednesday and added 0.9%.

Not bad, not bad at all. As overpriced as this market seems, dip buyers cannot help themselves.

As I wrote Tuesday, there were two ways to trade Wednesday based on the resulting price action:

Bounce and close well [on Wednesday], that is a buy signal with a stop under the intraday lows. If Wednesday’s selling cannot find a bottom, lock-in profits in our existing positions and agressive traders can short a violation of 4,100 with a stop just above this level.

Dip buyers took control not long after the open and this pullback disappeared even quicker than it came. But that’s the way this usually goes. Either dips bounce shockingly quickly or the selloff goes a whole lot further than anyone expected.

At this point, this looks like just another shockingly quick bounce.

As I described on Tuesday, Wednesday’s bounce was buyable with a stop under the dip’s lows. As long as the index remains above this level, the bounce is alive and well.

But if prices fall under 4,120, the selling isn’t done yet and an aggressive trader can even try their hand at a quick short.

While the index trade worked nicely, NFLX did the one thing I least expected, hold steady following a large gap lower.

Normally, big moves either accelerate or they reverse. Almost never does the pre-market get it exactly right and put the stock right where it should be. That’s like flipping a quarter and having it land on the edge. But almost never is not the same as impossible and occasionally these things happen.

That said, I don’t expect this stability to last for long. Either the selling picks up steam or the dip buyers come rushing in. It didn’t happen Wednesday, but the same trade is still valid for Thursday.

Buy the bounce in NFLX or short the breakdown. This stock is going to make a big move in one direction or the other, we just need to wait for the market to tell us which way it wants to go. (Not bouncing Wednesday suggests dip buyers are scarce and that gives the edge to NFLX bears.)

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How the index is going to tell us what comes next, plus the best way to trade $NFLX’s miss

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Tuesday was another bad session for the S&P 500. The index lost 0.7%, adding to Monday’s 0.5% loss and making this give-back the biggest in a month.

Let’s be honest, things must be pretty good if the biggest thing we are worried about is a two-day, 1.3% decline. That said, every big selloff starts off small.

So which is it? An insignficant wobble on our way higher? Or the start of the next downturn?

Since both of these outcomes start the same way, looking backward won’t give us the answer. Instead, we have to look toward what comes next, most importantly, what happens Wednesday. If prices slump at the open and the selling accelerates, this dip isn’t done and we still have a ways to go. On the other hand, open weak, bounce off of those early lows, and close well above those lows, the worst is already behind us.

This divergence on Wednesday forms the basis for our next trade. Bounce and close well, that is a buy signal with a stop under the intraday lows. If Wednesday’s selling cannot find a bottom, lock-in profits in our existing positions and agressive traders can short a violation of 4,100 with a stop just above this level.

Most likely this is nothing more than a minor wobble on our way higher. But we are due for a down wave and if it is getting started, we don’t want to be caught on the wrong side of it.

NFLX reported disappointing subscriber growth after the close and got smacked in after-hours trade. There are only two ways this plays out. Either this is a lot of nothing and the stock will continue higher. Or this is the start of the next big pullback. In a stock with such a sky-high valuation, there no room inbetween.

Much like the above index trade, it all comes down to how NFLX closes Wednesday afternoon. Bounce from the early lows and this is buyable with a stop under the midday lows. On the other hand, close near the lows and this turns into a short..

Let the market tell us what direction this stock is deaded and then hang on for a quick buck.

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The best way to trade the indexes at the highs, plus what to make of this Dogecoin trade

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

On Monday, the S&P 500 experienced its biggest loss in nearly a month. That said, “biggest loss” only amounted to a 0.53% decline. This shows just how gentile and benign this rally has become.

Two steps forward, one step back. That’s how this works, always has, always will. While no one is flinching over a 0.53% decline from record highs, there will come a time when these losses start piling up. And by the time people become worried about it, a good amount of damage will have already occured.

Now to be clear, I’m not a bear or anything remotely close. But I’ve been doing this long enough to know this rate of gains cannot continue indefinitely. And once this surge runs out of gas, there are only two options left, sideways or down. Either way, that is a far better time to be locking in profits than adding new money.

For those that have been following these posts for a while, we are sitting on a pile of profits and it is time to get defensive and protect those profits.

Once we give up on the foolish idea of picking tops, we realize the only two choices left are selling too early and selling too late. And as is usually the case in the market, this doesn’t have to be a binary decision. Don’t think all-in and all-out, instead trade in shades of gray.  It is perfectly okay to take some profits and let the rest ride with a trailing stop. That gives us the best of both worlds.

For the time being, I’m holding for higher prices but if I see further weakness and closes near the daily lows, I will start peeling off profits proactively even if my stops haven’t been hit.

And you know what? Once I sell, there is nothing that prevents me from getting back in when prices bounce. It’s like having your cake and eating it too! Never forget, we only make money when we sell our winners.

Bitcoin tumbled under $60k support as it turned into a source of funds to fuel this borderline absurd Dogecoin rally. While I don’t have a problem buying something that is going up (meaning Dogecoin is a legitimate trade), but that is only as long as people are trading this and not investing in it. As long as a person is agile and willing to take profits, they can ignore all Dogecoin critics. But if a person believes the hype, good luck with that.

As for Bitcoin, the $60k breakout failed and it is best to get defensive until this gets back above $60k. Until then, expect the ride to get bumpy.

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When to lock in profits in the index and what the FAANG stocks are telling us

By Jani Ziedins | End of Day Analysis

Free End of Week Analysis:

After spending most of February and March consolidation between 3,900 and 4k, the S&P 500 finally broke out and launched itself nearly 5% in just two weeks.

Coil…spring…coil again…spring again…

So far everything is going according to plan. That said, 5% in two weeks is steep even for the most bullish of markets. That means at the very least, we should expect the rate of gains to slow down over the near term.

Expecting a slowdown doesn’t mean I’m bearish, just that I’m realistic and have been around the block a few times. Two steps forward, one step back.

That said, we don’t need to bail out of this market until the next dip actually starts. Keep holding for higher prices as long as the index remains above our stops in the upper 4k’s/lower 4,100s. Just because another 5% move is unlikely doesn’t mean it is impossible.

Savvy traders let the market tell us when it is time to lock in profits and so far this one isn’t signaling us yet. The biggest warning sign of faltering demand will be a couple of fizzles into the close. That is a good sign to lock in some profits proactively and we don’t need to wait for the market to hit our stops.

If there is one warning sign of a looming slowdown, it is the lethargic behavior of the FAANG stocks this week. These best-of-the-best stocks helped launch the 4k breakout, but these same stocks lagged behind badly this week.

If they get their act together next week and start outperforming again, all is forgiven and forgotten. But if their underperformance continues next week, expect this to weigh on the entire market and the near-term consolidation/pullback is upon us.

As we saw in February and March, the index cannot rally without the biggest stocks participating.

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How to protect profits in the index and the best way to trade $TSLA’s reversal

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

The S&P 500 popped 1.1% Thursday and is up 8% in three weeks. (Trade that with a leveraged ETF and the profits are spicy!)

Three weeks ago investors were cowering from spiking Treasury yields. Now I cannot even remember the last time I saw an article mention Treasury yields. But that’s the way this always goes; buy the fear and sell the relief.

As good as this trade has been, only a greedy fool expects the index to surge another 8% by early May. I’m not suggesting people rush out and sell everything because “stocks are too high!”, but I am saying we need to be far more careful following a nice, one-direction run like this. (Everyone knows stocks move in waves.)

Keep holding for higher prices but move up our trailing stops and consider locking in some profits proactively if the index stumbles into the close on Friday or early next week.

Wednesday was an awful day for TSLA and things were only marginally better Thursday. The stock popped early Wednesday and challenged $800 resistance, but rather than chase prices higher, investors hit the sell button and the stock ultimately finished down 4%.

While I’m not going to give up on this stock because of one bad day, but this intraday fizzle was a huge warning flag. The important thing is the stock stabilized Thursday and the selling didn’t continue.

Everything is fine as long as TSLA remains above $700, but lock-in profits if this retreats under $700 because the selling won’t stop until it hits $600 support. (The most aggressive trader could short a violation of $700 with a stop just above this level.)

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What to expect from the indexes over the next few days, plus when to buy $GME

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 “tumbled” on Wednesday. Or at least that’s the way a 0.4% loss feels after such a pleasant climb following the 4k breakout.

This rally to the mid-4,100s has been a little too easy and as such, some near-term selling is inevitable. Nine up days over the last few weeks will most likely be evened out with several days of selling. (Everyone knows markets move in waves.)

That said, there is no reason to rush out and abandon this market simply because we’ve gone up too many days in a row. As ridiculous as this feels, nothing prevents this from getting even more ridiculous before the inevitable pullback. (Just ask all the people that sold at 3,800, 3,900, and 4,000.)

As long as this remains above our trailing stops in the mid-4k’s, keep holding for higher prices. While we might experience further near-term weakness, there is no reason to assume anything fundamentally changed and this bull market is still very much alive and well.

GME bounced back pretty hard following a long string of down-days. But until we get above $200, this is nothing more than another lower-high on our way back to $100. GME is definitely a buy above $200, but until we get there, this remains a strong short candidate.

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When to get worried about the bull market and what to do with bitcoin at $60k

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Tuesday was another record close for the S&P 500, this time cresting 4,140 for the first time ever.

These gains mean we rallyed more than 400 points since March’s Treasury yield pullback. That’s 11% over a handful of weeks if you play the normal game and a whole lot more if you take advantage of levered ETFs (like I do).

As boring as this market seems, there have been plenty of opportunities to make good money riding this gentle glide higher.

The looming complication is sentiment typically flips after becoming too obvious. A few weeks ago, it was obvious spiking interest rates were going to kill this bull market. And now it is obvious fundamentals don’t matters and prices will continue higher forever.

As contrarian traders, we need to be ready to go against the crowd. That does NOT mean buying a falling market or selling a rising one. That is arguing with the market and no one every wins an argument wit the market. But now that prices have gone too far in one direction, we need to have A PLAN to deal with the inevitable snapback WHEN it happens (and not a moment sooner).

The easiest and most most braindead way of protecting our backside is following this rally higher with a trailing stop. The most undeniable aspect of any pullback is declining stock prices. If prices fall under our stops, we get out. Easy as that.

There are other signs the rally is running out of gas, but none of those apply to an index that keeps making fresh highs. We can dig into those warning signs when prices retreat from the highs, but until then, keep holding for higher prices and continue lifting our trailing stops.

This rally will end at some point, but this is not that point.

Bitcoin broke out above the old $60k highs and added another 5%. So far so good. Keep holding for higher prices with stops just under $60k. If this breakout fizzles and retreats back into the consolidation, demand isn’t ready yet. But as long as this cryptocurrency remain above $60k, keep holding for higher prices.

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An easy index trade and bad news for $GME bulls

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 spent most of the day ever so slightly in the red, but that 15-point dip couldn’t stick and this stubbornly bullish index finished near breakeven.

No doubt this rally cannot remain this easy and brainless for much longer, but as long as it continues trading well, there is no valid reason to argue with what is working.

Trading is hard enough and we don’t need to make it harder by arguing with the market. Keep following the index higher and lift our trailing stops. This will run out of momentum at some point, but it will go a lot higher than most people think before it does.

GME‘s latest flirtation with $200 is ending in disappointment. I was impressed with how well the stock was holding near $200 and that often indicates the stock wants to break through resistance. But there always comes a point where resting turns into stalling. As I wrote last week:

GME is a buy above $200 but it is struggling to close the deal and it cannot get above this key resistance level. Fail to deliver on this obvious breakout and this starts looking more like stalling than resting and we need to be extremely careful.

GME has clearly crossed the tipping point into stalling and things are not looking good for the stock. This is why it is so important to wait for the breakout before committing. One, it requires the stock to demonstrate its strength before we put our money at risk. And two, it creates a clear stop loss level to protect our backside.

If GME cannot arrest this fall in a real big hurry, expect the selling to accelerate and for prices to tumble under $100 in the blink of an eye.

This remains a strong short until it gets above $200.

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Why it doesn’t matter if this bull market is built on a house of cards

By Jani Ziedins | Weekly Analysis

Free Weekly Analysis: 

The S&P 500 added 2.7% last week with all of those gains pushing the index even deeper into record territory.

As I’ve been saying for a while, this is a strong market and by nature, strong markets go up more than they go down. And in this case, a lot more up than down.

A little over a year ago the index bottomed at 2,190 as fear of a global lock-down climaxed. But as is usually the case, reality turned out less bad than feared. Stock prices recovered from those oversold levels and the index now finds itself 90% above those Covid lows. And not only did we bounce back, but the index is actually 22% above those pre-Covid highs!

As crazy as this sounds, Covid has been very bullish for stocks. Chalk it up to government stimulus and ridiculously low-interest rates. But as far as the economy goes, the Covid lockdowns were little more than a bump in the road, and in fact, many consumers are sitting on such large piles of money they are bidding up the prices of houses and draining auto dealer inventories. Most businesses are struggling to keep up with demand and their biggest problem is keeping inventory in stock!

Is this economy build on a house of cards? Will inflation come along and knock everything down? Maybe. But here’s the thing, as independent investors, we don’t need to predict the future. The greatest strength we have is the nimbleness of our size. We can jump in and out of the market with a few mouse clicks. What happens next week, next quarter, or even next year isn’t material to us. As soon as this bull market runs out of gas, we get out.

There will be the inevitable false alarms and we will get shaken out by a few whipsaws that undercut our stops. But as long as we are willing to get back in, no harm no foul.

I don’t need to predict what the market will do next because I am nimble enough to react to it in real-time. At this point, I’m holding for higher prices and lifting my stops to the lower 4k’s. If prices dip, I get out. If they keep going up, I continue hanging on. It really is that easy.

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A simple trading plan for the indexes

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 finished Thursday within three points of 4,100. Not bad for an “overbought” market.

It took a couple of months to rally from 3,900 to 4k, but it only took a few days to make the next step to 4,100. But that’s the way this goes; lunge…rest…lunge again…rest again…

I don’t expect this latest breakout to go a whole lot further before falling into the next consolidation. We will hit 4,100 imminently, but it could be a while before we get to 4,200. As the saying goes, two steps forward, one step back.

That said, as long as stocks keep going up, there is only one way to trade this. Keep holding for higher prices and lifting our trailing stops to the lower 4k’s.

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Why I like boring markets and what’s up with $TSLA?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Wednesday was another quiet session for the S&P 500 following last week’s 4k breakout.

While most traders are addicted to drama, boring is vastly underrated. Emotional markets produce big moves, unfortunately, most of the time the big action occurs in the wrong direction. On the other hand, boring markets make far smaller moves, but most of them line up in the positive direction. And lucky for bulls, we are in the middle of a very boring market.

Headlines remain benign and stocks continue rallying on “less bad than feared”. Until something changes, stick with what has been working. Hold for higher prices and keep lifting our trailing stops.

The index finished with a small gain but someone forgot to tell TSLA. The electric car maker lost 3% in an otherwise decent day for leading growth stocks.

While we don’t want to overreact to a single day of underperformance, we need to see TSLA lead this market higher, not lag behind it.

Last week’s nice bounce off of $600 support was buyable, but if this underperformance continues, we need to pull the plug and lock-in profits while we still have them. (And if this retreats under $600, that becomes an attractive short entry.)

I’m not giving up on this stock just yet, but I have it on a short leash.

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Why the index keeps going higher and the next buy point for $GME

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 finished Tuesday mostly flat (-0.1%) after spending all day bouncing between small gains and losses. But flat after adding nearly 120-points over the previous three sessions is actually quite constructive.

Everyone knows stocks cannot go up every day, so pinning our hopes on a fourth, fifth, or sixth strong day is unreasonable. But holding all of last week’s 4k breakout and most of yesterday’s strong follow-on gains tells us investors are not rejecting this latest push to all-time highs. Confident owners continue holding for higher prices and few are interested in taking profits at these record-high prices.

No matter what the cynics claim about complacency, as long as confident owners keep holding for higher prices, supply remains tight and it is easy for stocks to keep rallying. As the saying goes, what is high tends to get even higher.

This bull market will fall like all of the others that came before it, but this is not that time. Stick with what has been working and that is holding for higher prices and moving up our trailing stops.

GME is a buy above $200 but it is struggling to close the deal and it cannot get above this key resistance level. Fail to deliver on this obvious breakout and this starts looking more like stalling than resting and we need to be extremely careful.

This is a perfect example of why we must wait for confirmation before jumping in. Sometimes close isn’t good enough and this is one of those instances where it is safer to be a little late than a lot early.

Wait for the $200 breakout and we can buy the bounce for a quick trade, but only after this gets above $200.

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Why stocks don’t care about the risks and the best FAANG stocks to own

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 exploded higher Monday morning following last week’s breakout through the psychologically significant 4k level. But this isn’t a surprise, as I wrote last week:

Never bet against a market that keeps making new highs. Until we start getting a series of lower-highs and lower-lows, this bull market is alive and well and there is only one way to trade this.

Most of the things cautious investors worry about are still hanging over us (Covid, rising interest rates, elevated unemployment, sky-high stock valuations, etc), but the stock market is no longer bothered by these things. But this is normal as headlines eventually become priced in.

Nervous owners that fear these headlines sell to confident dip buyers who don’t mind the risks. After enough time passes, we exhaust the supply of fearful sellers and prices resume their climb. That’s exactly what happened here. The environment is not great, but we have definitely avoided the worst-case scenarios and less-bad is all we need to keep the rally going.

From a trading perspective, there is nothing to do other than stick with what has been working. I’m holding for higher prices and lifting my stops, now spread across the 3,900s.

We can argue with the market or we can profit from it. I choose profit every single time.

No doubt something will come along and rain on this parade (because it always does), but until we see a series of lower-highs and lower-lows, there is only one way to trade this.

The FAANG stocks finally turned it on are helping propel the indexes to these record highs. FB is back making record highs while GOOGL was already near all-time highs and keeps adding to them.

AMZN, AAPL, and NFLX are a little further back, but that is actually a good thing for us because that means these stocks have more profit potential during their recovery.

I really like FG and GOOGL, but right now, AMZN, AAPL, and NFLX are even more attractive.

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After 4k, is it finally time for a contrarian trade, and are the FAANG stocks back?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 surged to record highs and closed 20 points above the psychologically significant 4k level. It’s taken a few weeks, but we finally did it.

Wall Street brokers are already handing out the 4k hats. While that sounds like the perfect invitation to make a contrarian bet, only fools trade against something for no other reason than it looks “too high”. Before giving up on this bull market, we need a concrete and compelling reason to stop going along with this strength.

Without a doubt, this 4k breakout could be the beginning of the end, but the very first thing that needs to happen is for prices to stall and retreat. The very most important part of that sentence was “retreat”. Until stocks actually retreat from these levels, there is nothing to do but keep holding for higher prices.

A lot of people got out prematurely at 3,600, 3,700, 3,800, 3,900 and now 4k because stocks are “too high!” The thing these people forgot is “too high” often ends up going even higher.

Never bet against a market that keeps making new highs. Until we start getting a series of lower-highs and lower-lows, this bull market is alive and well and there is only one way to trade this.

The S&P 500 broke through 4k and the FAANG stocks came back to life! It’s hard to say who is leading who, but the most important thing is both are finally working together. As long as the FAANG stocks keep this newfound strength, expect the indexes to continue pushing higher.

Of the group, FB and GOOGL are clearly the best and either at highs or very close to them. That said, the FAANG laggards often catch up and that means we shouldn’t give up on AAPL, NFLX, and AMZN. In fact, there is more upside in betting on these catching up than chasing FB and GOOGL near the highs.

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Another good day for $SPX and a buy signal from $TSLA

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

After spending most of Wednesday at record levels, the S&P 500 pulled back modestly at the end of the day and just missed a record close by a measly 2 points. Close, but no cigar.

While it is never helpful to see a stumble into the close following a push to fresh highs, the market deserves a pass this time. Wednesday was the final day of the first quarter and some institutional investors move things around for housekeeping and reporting purposes. This window dressing isn’t significant and doesn’t mean anything. I won’t give this late fizzle a second thought as long as the selling doesn’t continue Thursday.

At this point, the market is in good shape and passing through 4k seems inevitable, if for no other reason than the market tends to go where everyone is looking.

It’s taken the market nearly two months to go from 3,900 to 4k. That’s a very reasonable amount of time and cooled off some of our previous “overbought” conditions. Sometimes markets rest by pulling back, other times they rest by trading sideways.

This sideways consolidation hasn’t been long enough to support a dramatic rally, but we are on pace for a continued grind higher. As long as we keep getting more up than down, everything is going according to plan.

TSLA has done a really nice job bouncing off of $600 support. As I wrote on Friday:

$600 is our line in the sand. Above support and TSLA is buyable. Under support and it becomes shortable. It doesn’t get any more straightforward than that.

If anyone was fortunate enough to be reading this blog back in February and locked in some nice profits near $800, this is a good place to be adding some of that money back. Place a stop under $600 and see where this bounce goes.

That said, be wary of any retreat back under $600, especially so quickly after bouncing off of support. If dip buyers don’t show up and this falls under $600 over the next few days or weeks, that shows demand is a problem and lower prices are ahead. And the scary thing is there is a lot of clear air between $600 and $400 support.

But that is simply a contingency. As long as TSLA remains above $600, all lights are green.

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Why the S&P 500 is headed higher and $GME is worth a second look

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

On Tuesday the S&P 500 slipped for the second day in a row following Friday’s record close. That said, these two losses only added up to 0.4% and the index remains within easy reach of the psychologically significant 4k milestone.

The 10-year Treasury yield pushed up to another post-covid high. But as alarmed as equity investors were when this yield rally took off earlier this year, this latest round of increases are largely being met with a yawn. But this isn’t a surprise. We’ve been living under the clouds of higher interest rates for a couple of months and if they were going to kill this bull market, it would have happened by now. Instead, most stock owners remain confident and are holding for higher prices.

A popular stock market truism warns us of complacency. While complacency often proceeds the fall, the thing most people forget to mention is just how long compliance lasts before the fall. Markets can stay complacent for many months, even years. That means anyone trading the early signs of compliancy is getting out long before they should. While these cynics will eventually be right, they will be wrong for a long, long time before that happens.

Weak markets don’t keep making record highs. That means this market is strong, not weak. Until we have compelling evidence to the contrary, continue giving this bull market the benefit of doubt. Hold for higher prices with stops spread around 3,900.

While the charade in GME will eventually come crashing back to earth, there are no limits to what fools and their money can accomplish when they pool their resources. While GME is headed back to $20 over the medium term, the near-term upside looks interesting. As obvious as the inevitable collapse is, we have to take note of just how stubbornly the stock is holding near $200.

One of the most powerful signals in the stock market is when something is not doing what everyone thinks it should be doing. In this case, the obviously overvalued GME should be tumbling back to $20. The fact we are still holding near $200 tells me there is still a lot of demand at this level and the stock wants to take another run higher.

This might be the last gasps of a dying stock, but if this gets above $200, it is buyable for a (very) quick trade. If you get a 20% or 50% pop, take your money and run because those profits will likely be gone hours later.

And once this near-term pop fizzles and retreats back under $200, this becomes a great short entry point.

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An imminent milestone for the S&P 500 and a warning for $ZM owners

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

Monday started with a modest wave of selling as the S&P 500 digested weekend headlines of a major institutional investor blowing up and unfilled margin calls leaving several banks with massive write-downs.

Experienced traders are taking note because similar episodes triggered a cascade of falling dominos sent the indexes into a bear market. But so far, this story seems contained and hasn’t spread beyond a few directly affected stocks.

At least for the moment, the market is treating this as an isolated incident and Monday morning’s dip was shallow and fleeting.

The afternoon rebound reversed all of the early selling and left us a small fraction shy of all-time highs. As much as the cynics rant about complacency, vulnerable markets don’t keep making higher-highs. The thing the critics forget is just how long complacency lasts before the fall.

At this point, we are only a handful of points from the psychologically significant 4k level. It’s taken us a couple of months to go from 3,900 to challenging 4k, but it looks like the breakout is finally coming. After two months of resting and consolidating, the market is ready to go.

I’ve been ragging on ZM for months and unfortunately, the situation isn’t getting better. After a brief bounce above $400 support last month, the stock retreated back to recent lows and is poised to start making fresh lower-lows. This remains a short under $400 and for anyone still holding ZM, it is about to get worse.

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Dissecting a stubborn index and $TSLA’s magical level

By Jani Ziedins | Weekly Analysis

Free Weekly Analysis: 

The slow grind higher continues and the S&P 500 notched another record closing high on Friday.

The index exceeded the old highs by an almost imperceptible 0.42 points (0.01%), but a beat is a beat. Especially given the headline environment we have been enduring. If this bull can keep making higher-highs despite these headwinds, just imagine what will happen when things get less bad!

The critical difference between stalling and resting is what the market “should” be doing. If the news flow is good and the index struggles to rally on positive headlines, that is stalling and something we should definitely be worried about. (Running out of buyers.) On the other hand, if the news is mostly negative and the market refuses to go down, that is definitely a bullish indication and tells us the market wants to go higher. (Tight supply.)

As every cynic can attest to, there are far more reasons for stock prices to tumble than go up. In fact, most pundits are confused by the market’s stubborn resilience. This contrarian behavior confirms there is more energy left in this rally and we shouldn’t give up on it just yet. As obvious as this sounds, something that refuses to go down will eventually go up.

TSLA slumped 5% last week and is on the verge of falling under $600. Violate support and this becomes a great shorting opportunity. On the other hand, bounce off of support and this becomes a great buy. While it sounds like I’m trying to play both sides of the fence, that’s the way these momo stocks work. Either they are racing higher or they are crashing lower.

$600 is our line in the sand. Above support and TSLA is buyable. Under support and it becomes shortable. It doesn’t get any more straightforward than that.

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Is the $SPX dip already over and what should we do with $TSLA at $600?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Thursday gave us another rough start for the S&P 500 and the index easily undercut last week’s lows. But rather than trigger a follow-on wave of defensive selling, supply dried up and prices bounced back above 3,900 support before the close.

Sometimes things appear the most hopeless moments before turning around. Between violating 3,900 support in a poor finish Wednesday afternoon, gapping even lower Thursday morning, undercutting last week’s lows, and crashing through the 50dma, everything lined up for a free-fall. And that’s exactly when the market found a bottom and bounced.

We could dissect employment reports, Fed comments, and Congressional testimony, but in the end, the only thing that matters is how the market reacts and it actually took all of these developments in stride. Rather than devolve into a herd of panicked sellers, confident owners shrugged and kept holding.

Thursday’s dip and bounce wasn’t dramatic enough to qualify as real capitulation, but it was good enough to confirm most owners still don’t want to sell. As long as they continue holding for higher prices, dips will remain shallow and quick.

Following a similar theme, TSLA slumped back to $600 support before catching a bid and finishing the day closer to the mid-$600s.

So far so good. TSLA remains ownable above $600 support and we can keep holding. But if prices retreat and fall under $600 support, this turns into an attractive shorting opportunity.

With such a powerful momentum stock like TSLA, there is only hot or cold. Either we are riding a wave higher or we are getting out of the way. A violation of $600 support means there is more pain ahead and we should do our best to avoid getting pulled down in another wave lower.

It is okay for a person to be both bullish on the stock and also defensively locking in profits when prices retreat past our trailing stops.

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A strategy to protect $SPX profits and beating the $GME horse

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

Wednesday was another rocky session for the S&P 500 and the index lost half a percent. That makes four down days out of the last five sessions.

Interest rate headlines continue dominating the financial press. That said, the reactionary selling has been relatively constrained and the index is only marginally below last week’s record highs.

The thing to remember about stock market crashes is they are breathtakingly quick. In comparison, we’ve been dealing with bond yield headlines all month, yet here we are within 2% of all-time highs. That hardly qualifies as panic selling.

But while the rally still appears to be in good shape, we always need to have our line in the sand. While this dip will most likely bounce like all of the other dips that came before it, there are no guarantees in the market.

The greatest advantage we have as independent traders is the nimbleness of our size. There is no reason to hold a position all the way down given how effortless it is for us to sell and buy back in.

While picking stops is never easy, spreading stops across a range helps minimize indecision and second-guessing. Pick a high point, a low point, and something in between. This way you are locking in some profits quickly and you are giving other positions a little extra room to avoid a routine shakeout.

If prices bounce quickly, only a small portion of your position was shaken out. If prices fall further, you got out at higher levels and can actually take advantage of buying the bigger discounts.

The most important thing is as soon as you get dumped out, start looking for the next buying opportunity to get back in. Many times the pullback proves to be a false alarm and the bounce can be within days if not hours.

While riding through whipsaws is annoying, I’d much rather deal with that minor inconvenience than suffer a large loss by stubbornly holding a larger dip that doesn’t bounce.

It was another brutal session for GME. The stock lost 1/3 of its value and odds are it will never get back above $200 ever again.

As much as the cheerleaders are willing this to go higher, it seems everyone who wants to pay $200 for a $20 stock has already bought it and there are no other fools left to keep pushing prices higher.

Volatility will remain off the chart for a while but expect every dip make a lower-low and every bounce to make a lower-high.

If a person didn’t sell this latest echo, they have no one to blame but themselves and their greedy impulses.

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