On Monday, QQQ gapped below the 100-day SMA, never a good sign. However, I mentioned at the time that it was still holding its main support at $701.59, and that until that broke there was a path higher in the immediate future. The rate hike and the Warsh speech drove QQQ down so that it could finally fill the gap left from the August 4th bullish retest gap.

The last FOMC meeting took place on July 29th, which gave us a bear candle breaking the 100-day SMA on close, a pretty gnarly candle, and then the next day gapped higher and ran. That all sounds pretty familiar if you ask me.

The prior 3 FOMC meetings had bearish reactions on the day of and reversed the next day with bullish gap and go moves. The market continued higher after the April and July meetings, while the move higher in June turned out to be a bull trap before a quick and significant sell off. The question now is which one is happening this time.

QQQ Daily Chart

I’m still leaning bullish because we’ve held the key support I’ve had on my chart for the last month. That support was the $701 gap fill and the 100-day SMA on SPY. My view hasn’t changed, and I think the gap above at $730 is the major target for QQQ, with a new ATH as the major target for SPY.

If QQQ starts to break back below the 100-day SMA again, that would be concerning, especially since the gap below has already filled, and I’ll hedge and get cautious if that happens. Especially since history says a 7%+ correction could be coming in the next 60 days now that we’ve started a new rate hike regime. Even with that knowledge, I don’t think it’s out of the question for a push higher to suck in all the bullish traders once again, only to get trapped into new highs before a sell off into October.

While this market is choppy and not the easy trending market we saw in April and May, there are obvious levels in play, and so far SPY and QQQ have not violated them.

SPY Daily Chart

AI and Semis Leading the Way

When we look at what drove the push higher, a lot of it was AI names and semiconductors. That’s why QQQ performed much better than SPY, RSP, DIA and IWM. NVDA hit my main target as it filled its first gap, and now its second overhead gap is Target 2.

Another one I have my eye on is AMAT. This stock has taken an absolute beating over the last couple of months and is back into the 200-day SMA after a 45% sell off. When it first touched the 100-day SMA, it got a decent bounce of about 20% higher. After 4 candles in a row this week holding the 200-day SMA, a 10% to 15% move higher to fill the gap and push into the prior pivot, and possibly even the 100-day SMA, seems pretty reasonable.

This could be played by buying off the 200-day SMA, with a stop being a close below the 200-day SMA and failing to regain the moving average the next day. Or the play with more confirmation, would be to wait until it breaks above the $433 level, with a stop below the 200-day SMA. If it really starts to fail the 200-day SMA the unfilled gap at $355 becomes the next big downside target.

AMAT Daily Chart

The rate hike cycle of 2026 has officially begun. Kevin Warsh said “the plain fact is that inflation is too high and has been for too long.” The Fed increased rates by 25 bps, which was a surprise to literally no one. When there’s a 90%+ chance of a hike, it’s for sure happening. That’s not a guess or an online betting market, it’s the Fed funds futures market and bonds dictating where things are going.

The market reacted slightly more than many expected, mostly due to the tone of Warsh’s speech and the fact that the dot plots show more hikes on the horizon. The odds of another hike this year just went up to 83%, which, since we’re still far out from the next two FOMC meetings, isn’t a certainty, but the market is clearly assuming more hikes are coming.

This is the first hike we’ve seen since 2023 and begins a whole new rate hiking regime. If you want to know what the market does when we start a new hiking regime, check out the video I made on the topic.

The TLDW: history tells us the market sells off in the first 60 days after the hike, which leads to a pretty solid buying opportunity. This would line up with midterm year seasonality quite nicely. A choppy, semi bearish move lower to shake out some of the leverage and remove some froth into October would set up the perfect end of year rally.

Right now QQQ is under the 100-day SMA and starting to get comfortable down there. I’ll be the first to admit we often don’t get any real moves until a few days after the FOMC meeting, so if we do start to break back above the 100-day SMA on QQQ, that would be a decent short term trade, targeting that elusive gap at $729. If it instead breaks below $701.59, which it did wick below on Wednesday, finally filling the gap, that would be a warning sign we’re heading lower, which as mentioned above would set up some really solid buying opportunities.

QQQ Daily Chart

SPY held the 100-day SMA, coming within pennies of touching it on Wednesday after closing with a decent lower wick. As long as SPY holds the 100-day SMA, there’s a decent chance of a post hike bounce like we saw in 2022 and 1999 before eventually dropping. If SPY breaks below the 100-day SMA, the next real solid support shows up at the 200-day SMA around $715 to $720.

SPY Daily Chart

Sector Watch & Relative Strength

There’s certainly some weakness out there right now in tech, but also in banking, consumer defensive and consumer cyclical names like COST, HD and MCD. The strongest two sectors I’m finding are cybersecurity and oil refining.

Oil refiners like MPC, PSX, VLO, DINO and SHEL continue to lead and push higher day after day. VLO pulled back this week once again into the 8-EMA on the daily chart, an average it’s been riding higher off of for the last month. Buying off that average or the 21-EMA, both popular momentum averages, has been a super solid setup. I pointed out VLO on September 4th to the RLT Swing Trade community when it was dropping into the 8-EMA, and it’s done it again this week. At some point the momentum on these names will shift, but in the meantime, the trend is your friend.

VLO Daily Chart

Same goes for cybersecurity. With fears of AI ramping higher, cyber names become even more important. CRWD, PANW, FTNT and NET are the big names I watch, but OKTA has been crushing it higher and ZS is trying to break out of a massive base. I’m watching this one very closely.

We had the highest volume candle on the monthly chart back in May, with a massive upper wick. That wick came from the May earnings gap down, when huge bear volume came in and was almost immediately trapped as ZS moved higher. ZS is also trying to close above the 200-week SMA for the first time since early February 2026, when it broke down. It’s bouncing off the 100-month SMA and has a double bottom on the weekly chart.

Overall, dips are buyable as long as it holds its 100-month SMA, 200-day SMA and 100-day SMA. If it breaks out from here, that’s also a level worth watching, although breakouts in this market have been pretty trappy and tend not to follow through.

ZS Daily Chart

Monday’s gap was a pretty bearish gap on the QQQ. It was a weekly gap since it happened on a Monday, and it was below the daily 100-day SMA. We faded for most of the day because, luckily for the bulls, the gap was into a very solid support level. On the intraday move we saw a perfect 10/10 double bottom right off the $701.59 support level I’ve been watching since the gap happened back in July. It was a great day for fades, but some swing trades, especially in the AI space, took a hit.

QQQ 15 Min Chart

QQQ has further solidified $700 as the key level to watch on the chart. If it closes below there at any point in the next week or two, the odds of it hitting the 200-day SMA go up quite a bit. Until then, we likely stay in the chop zone.

QQQ Daily Chart

In 2026 we’ve been in the chop zone for most of the year. Looking at SPY and QQQ, we’ve only had 63 days in April and May, and then 4 days in July, where the market was really trending nicely higher. Everything else has been choppy pullbacks. So if it feels like it’s been a choppy year, you’re right. We’ve had 190 choppy days against 67 trending days.

SPY Daily Chart

Much of the chop comes from the fact that when this market does move, it moves aggressively and vertically, like we saw off the May lows and the April 2025 lows. The market is still digesting those moves and figuring out whether current levels are sustainable and whether higher prices are justified. As long as we hold key support, higher prices are certainly possible. But if we break today’s lows, the odds of a weak September and October go up dramatically.

Bitcoin Update

Bitcoin saw some bullish action Monday ahead of the CLARITY vote happening on September 15th. Tuesday’s vote isn’t final passage, it’s a cloture vote to open debate. If it doesn’t pass, the bill is dead for 2026. If it does pass, I think we see a decent move higher, at least short term, since it opens the door for the act getting passed. Right now the odds of that happening are pretty low.

From a price perspective, we’re still tracking the 2023 price action closely. We ran up hard and rejected off the 120-day SMA on the 3-day chart. The 2023 analog says we should get a drop into the $70,000 region, and then eventually break higher above the 120-day SMA on the 3-day chart before consolidating between 80k and 90k for the next several months.

This sets up a solid trade thesis if it plays out. The dip is buyable into the $71,000 to $67,000 zone if we get there. As long as price holds above $65,000, the bullish setup remains viable. If instead it breaks and closes above the 120-day SMA on the 3-day chart, now at $80,400, I’ll add to my position after that close.

BTC 3 Day Chart with 2023 Analog

It’s been a strange weekend in the AI world. Anthropic CEO Dario Amodei called for a slowdown in AI development, and Elon Musk agreed with him. The CEO of OpenAI has made similar comments lately, and we’ve now seen two Anthropic employees quit over concerns about AI safety. Meanwhile, President Trump and Palantir CEO Alex Karp argued that slowing down would just hand China an advantage in the AI race.

If you take the weekend’s comments at face value, either AI is going to take over the world, or China is. If that is not stuck between a rock and a hard place I do not know what is.

Stocks showed continued weakness last week, and really for the past month. Given the seasonality we’re up against, the breaks below key averages in GOOGL and AMZN, and the fact that QQQ hasn’t made a new all time high since June 4th and just can’t push higher, I’m growing increasingly cautious.

If QQQ opens below the 100 day SMA, that’s a meaningfully bearish gap, and I’d expect a fill of the $701 gap this week. That’s a solid level of support, and we could see a bounce there. But after failing at the 100 day SMA with this much uncertainty weighing on the market, I expect the pullback to continue over the next month.

QQQ Daily Chart

The market typically doesn’t perform well at the start of a rate hiking cycle, which likely begins Wednesday. There have been five rate hiking cycles in the SPYs existence and the SPY always saw at least a 7% drawdown within the first two months. The good news: those pullbacks have historically created some phenomenal buying opportunities.

• 2022: SPY pulled back 19% over 211 days from the first hike to the market low.

• 2015: SPY pulled back 13% over 35 days from the first hike to the market low.

• 2004: SPY pulled back 7% over 38 days from the first hike to the market low.

• 1999: SPY pulled back 10% over 111 days from the first hike to the market low.

• 1994: SPY pulled back 8% over 18 days from the first hike to the market low.

Every one of these drops turned into a buying opportunity for traders willing to step in, and several were phenomenal opportunities even on a longer-term horizon. The one exception from a long-term perspective was 1999. The market topped just 158 days after the low we discussed above, followed by the Dot-com crash, which took the SPY down 50% over the next 931 days. However, even in that case, the SPY rallied another 26% off the hike low before eventually topping and crashing.

SPY Daily Chart

If history repeats and we get a September and October drop, which seasonality certainly points toward, that pullback should be buyable heading into year end, even if the AI bubble is about to burst.

Fear is once again creeping back into the market. Technical setups keep setting up and then falling apart. Strong breakouts and breakdowns aren’t lasting, they’re reversing in moments with little to no follow through. The Mag 7 is heavy and unable to run as a group, with the market growing wary of the hyper spending and free cash flow tipping negative across the group.

Swing trading has been difficult lately, no doubt about it. That said, with the macro backdrop we have right now, and SPY and QQQ still holding up quite well, it’s hard to get overly bearish, yet. That’s especially true because this is a range bound market for now, which means after four days of selling and the S&P dropping into support, we’re likely due at least some relief rally.

SPY Daily Chart

If just a few of these looming macro issues (oil, inflation, bonds, the Iran conflict) get cleared up, this market can get moving higher again. But until then, I see continued sideways chop, making this a buy low, sell high, and sell, high buy low market.

Oil Surges

Oil really needs to chill out. Ever since it broke above the 100-day SMA and its downward trendline on September 1st, it’s been ripping higher in a near vertical fashion. I warned that a break above that level would be negative for equities, but we haven’t really seen broad based fear enter the market. SPY, QQQ, DIA and RSP are all still above their 100-day SMAs. Only IWM has lost the 100-day SMA, and QQQ is now threatening a break of its own.

If oil keeps going vertical, don’t expect your equity portfolio to be ripping higher alongside it. Oil ripping higher drives inflation higher, which drives yields higher and bonds lower.

Crude Daily Chart

Right now the market is pricing in roughly a 70% chance the Fed raises rates next week, with the 2-year also signaling a hike is likely. That’s actually not the worst outcome as I think much of it is getting priced in already. If it happens, bonds might settle down a bit, and I think equities can absorb that small hit. If we don’t get the hike, which at this point would be the surprise, I could see equities push higher on that surprise. The one caveat is if bonds react badly to a non hike, that could spook the broader market. But bonds reacting badly is likely to just bring more intervention from the Fed anyway.

Simplifying in the Chop

I’ve been saying this for a while now, but with a market this choppy, I’m zooming out and taking a simpler approach. I’m still taking small swing trades because I can’t help myself, and those have worked with varying degrees of success, essentially breaking even on the lot of them over the past six weeks. Honestly, breaking even on swings in this market is a win in my book. With how many banger setups have failed to play out, it would be easy to get discouraged, but if you’re protecting your downside and staying nimble, you’re winning, and you’ll be ready to capitalize once this market starts moving again in either direction.

I’m using the 100-day or 200-day SMA as a hedge level on everything I’m in right now. QQQ closed essentially right on its 100-day SMA. It also has solid support at $701, which is the key level I’m watching right now. As long as QQQ holds that level, I won’t get too bearish.

QQQ Daily Chart

Seasonality

Midterm year seasonality for SPY, QQQ, IWM and DIA is historically bearish through September, with a low typically forming between late September and mid October, which has created excellent historical buying opportunities. If we do break down over the next 3 to 6 weeks, I’ll be buying some of my favorite names and indices on weakness and preparing for a strong rally into year end.

The short term trader in me will take some hits along the way, but the position trader in me, the one who actually makes most of the money, will be quite happy if we do sell off over the next several weeks.

Midterm Election Year Seasonality

The past three days have been extremely uneventful on the QQQ and decently bearish on the SPY, RSP and DIA. SPY and IWM are back down to some key support levels making it go time for bulls if they are going to show back up. We’re seeing a continuation of the bearish factors that continue to plague this market, which include oil breaking out and ripping higher, and long dated bond yields breaking out as well.

QQQ Daily Chart

This bullish push in long dated yields is happening despite the $6 billion Treasury buyback operation that was announced. It seems like the bond market wants to see just how much intervention we’re going to get from the Treasury. With bonds tanking and oil ripping, it’s only a matter of time until one of two things happens: either we get larger intervention and those things reverse, letting the market grind higher, or equities as a whole start to correct.

SPY Daily Chart

Tech Stories of the Day

There were two big stories in tech today. Meta announced it’s launching Meta Muse, its first personal AI agent, and Apple announced its new iPhone lineup, which included a $2,000+ foldable iPhone.

I’m an Apple user and I like their products, but Apple is doing anything but innovating these days. Pretty sure Samsung launched a foldable phone over five years ago. That said, innovating or not, Apple makes $128 billion a year in income (not revenue), and if they can sell a lot of these foldable phones for two to three grand, with an upgraded Siri that’s no longer dumb as a box of rocks, the stock should do quite well.

Apple

For a longer term trade on AAPL, I’d still like to buy lower at the 200-day SMA, which would put it down about 17% from the highs, a historically solid buying zone. The next big buy zone for a long term hold would be the 100-week SMA, roughly a 30% pullback, a great historical buy zone.

Apple loves to pull back 30% every few years, and pulls back 15-20% at least once a year. We already got a 15% pullback to start the year and a 13% pullback in the middle of the year in June. I think the buy-low crowd on AAPL is going to have to stay patient for now. It does have very solid support at $310-$304, which it held on today’s news.

AAPL Daily Chart

META

META had a very solid gap up today, and as much as I hate on the stock and the chart (mostly because it’s been a choppy, trapy mess for over a year now), it did close back above the 100-week SMA. Wednesday’s candle can be used as a short term risk mitigation level, since it’s a high volume candle sitting right at the 100-week SMA.

I do think that if the QQQ and AI tech start selling off along with the SPY and the broader market in a fear driven event, META won’t be spared. If META closes back below $600 anytime soon, this was just another trap, and it’s back to the straight up, straight down choppy status quo that’s defined the price action for the last year. However, if it can hold here and break out above $680, that would be a big change to the downtrend and a positive development for the META bulls.

META Daily Chart

Overall Market Thoughts

Wednesday wasn’t a great day for the bulls. We’re seeing more chop and more of the same consolidation we’ve had since June 4th.

NVDA is pulling back a bit after teasing bulls with a possible ATH breakout. However, I’d still call NVDA bullish as long as it holds the 100-day SMA here.

GOOGL and AMZN have now gapped below key averages, which is never something you want to see as a bull. GOOGL actually gapped below its 200-day SMA on Tuesday, stopping me out of my short term swing trade. It closed back above the average, looking like a possible bear trap, then gapped below the average again today and closed with a bear candle.

The Trillion Dollar Titans look heavy right now, but if we look left on the charts, they’ve all had massive runs they need to digest. As long as they remain Magnificent Spenders with negative free cash flow, the market is going to stay wary of them. That said, they’ll be back in favor eventually, so if we do get some dips, that’s the time to plan which names you want to own and where you want to buy them.

If GOOGL really dips here, it could be a magnificent opportunity to own it before their own Muse announcement.

GOOGL Daily Chart

Much of tech continued its strength into the weekend with solid closes on Friday. QQQ pushed slightly higher, and the path of least resistance still looks like it is up into the $729 gap fill.

QQQ Daily Chart

We saw NVDA scorch higher on Friday, only to run into some selling later in the day, leaving an inverted hammer near the highs. After such a strong move, I could see some consolidation on NVDA before another continuation higher. As long as NVDA and the big hitters in AI continue to hold up, I see no reason to start getting bearish on this market.

Having the Trillion Dollar Titans and the AI trade push higher for another leg is really all this market has been missing to break out into the next leg higher.

Google

GOOGL, the next key AI name, is sitting right on its 200-day SMA.

The risk/reward is really good here because if GOOGL starts taking out that 200-day SMA, it is going to spell trouble for the stock. That would put a push down into the $315 area back into play.

This name has been extremely choppy, and I think one of the better ways to play GOOGL right now is with a longer-term time horizon. Slowly adding on weakness and waiting for a more substantial edge to show up makes more sense to me than trying to swing trade every move.

The one swing trade I do see is buying off the 200-day SMA with a stop, or a hedge, just below it. However, we have tested the 200-day SMA quite a bit lately, so this is not nearly as high-probability of a trade as it was on the first couple of tests.

GOOGL Daily Chart

Apple

AAPL is not a key piece of the AI trade right now, but it is absolutely a key piece of the market.

It hit the key overhead gap and reversed hard. I no longer have a position in AAPL since it hit all of my targets, but if it can hold above $310, it should not have much of a drag on the market. We could easily see QQQ continue higher without AAPL leading the way.

AAPL Daily Chart

Microsoft

MSFT does look like it has some pulling back to do.

It has shown great relative strength throughout August and recently made a new relative high. However, there is a large gap below at $670 that I think will eventually fill. It is just a matter of when.

If MSFT drops down to that level in a choppy, overlapping, consolidating pattern, I think the area from $670 down toward the 100-week SMA becomes a pretty attractive level for anyone looking to gain longer-term exposure.

I am going to hold off on this name for now because it just made such a massive move higher, and the market is still quite wary of Microsoft’s massive capital expenditure spending.

MSFT Daily Chart

Amazon

AMZN looks really solid, which is good because it is a name I have been focusing on quite a bit over the past few weeks.

It is bouncing off a major support area that includes the double-bottom neckline, the 100-day SMA, and the 50% gap fill from the earnings gap.

I think this name is pretty easy to risk manage here. A close below $250 would mean we are breaking below a lot of the levels that should hold.

If that happens, I think the earnings gap is going to fill. That gap will likely fill eventually anyway. The question is whether AMZN can make new highs first.

AMZN Daily Chart

Micron

Now to the names that really moved on Friday, starting with MU.

The AI names had some really constructive pushes on Friday, and MU was one of the standouts.

MU gapped above the $969 level and ran all day closing just above its $1,000 resistance. The gap above at $1,124 could fill this week if the AI trade really starts moving again. If it closes below Friday’s candle this week, it would be another potential trap, similar to what we saw on August 17 with MU.

I love the volume coming into MU. I love Friday’s gap and the overhead gap, and I really like the fact that we are seeing money rotate back into this sector.

MU Daily Chart

Taiwan Semiconductor & The AI Stack

TSM also looked great on Friday as it finally closed above the AVWAP from the highs and held the 100-day SMA with a hammer.

AMD also closed back above the 100-day SMA with an increase in volume, making it another name that is relatively easy to risk manage. As long as AMD holds the 100-day SMA and the recent pivot, I am staying bullish.

Everything in my AI watchlist and portfolio, including INTC, MRVL, ASML, STX, and AAOI, looked solid on Friday.

But nothing looked better to me than SNDK.

AMD Daily Chart

Sandisk

SNDK has been one of the names I have been posting about in the RLT Swing Trading chat as I continued to add on the 100-day SMA.

It has held up extremely well since its August 13 breakout, especially compared to most of the AI stack.

I love seeing relative strength, and on Friday we finally got the payoff. If you are not already in SNDK, I am looking to add into a retest of Friday’s candle and keep the stop below the 100-day SMA.

Even if SNDK makes a lower high from here, it could still easily have 20% upside from Friday’s close. That is the kind of risk/reward and relative strength in a strong them that I want to see.

SNDK Daily Chart

One Interesting Seasonal Stat

One very interesting fact I saw on X over the weekend is that every single trading day after Labor Day has closed red for the past nine years. That is a pretty wild statistic.

If that pattern repeats this year, it could actually give us some good retests of Friday’s price action, assuming the market continues higher into the rest of September and bucks the normal seasonal weakness.

If the bulls can push through that seasonality and take the market to new all-time highs, it would be another sign of just how strong this market really is.

The Big Picture

Overall, I think the market’s resilience in the face of overwhelming uncertainty is even more reason to assume this bull market can keep ripping.

I have all of my levels lined out where I will risk mitigate, and we are right on top of a lot of them. I actually like that scenario even more because it means the risk/reward is really solid at this stage.

There is absolutely a chance we get a big breakdown and some stop-outs. But there is also a very real chance that the bulls take back control and push this market higher. If that happens, I stand to make much more than I stand to lose, and that is exactly where I like to be.

I do not need to know which scenario happens ahead of time. I just need to know where I am wrong, where I want to buy, and where the risk/reward makes sense on high-probability setups.

Right now, the levels are clear, the AI trade is finally showing signs of life again, and the bulls are still in control, even if just by a little.

In this article, I will refer to it as the Bull/Bear Line.

The setup so far has been extremely similar to 2022. We saw a vertical move lower, some consolidation, and now a vertical move higher. Everyone, including me, wanted a drop down to buy lower, but Bitcoin rarely makes it that easy and it just broke higher. It loves to leave people behind and not give that solid retest entry until after it has already broken out higher.

In 2022, BTC exploded higher, consolidated just slightly, and then got a solid push back up into the Bull/Bear Line, just like we are doing today. Once it hung out around the Bull/Bear Line for a week or so and after it wicked above its prior highs, it finally gave up and gave us a nice deep retest.

BTC Daily Chart 2022 Low

That retest only came after Bitcoin sucked everyone in, wicked into a new relative high, and got everyone to chase it higher. Then it dropped hard, right into the 50% retracement level of the entire bull move off the bottom.

So far, we are following that exact script. We have yet to make a new relative high into $83,000, but I would not be surprised if that is coming in the next couple of days. If we get a solid close above $83,000, a lot of people will be sucked into the trade for fear of missing out on the path to $1 million or whatever other massive numbers Bitcoin bulls are throwing out as targets.

BTC Daily Chart Present Day

And honestly, that is exactly what I would expect Bitcoin to do if it wants to create the best possible setup for a deeper pullback.

If we close above the Bull/Bear Line and then the next candle closes back below it, consider that a trap. That would negate the bullish close above the moving average.

If that does play out, I will be looking to add long exposure down in the $74,000 to $70,000 range.

It feels insane to think BTC could drop back down to $70,000 after the move we have just seen, but history says that around $71,000 is where it would find support if history repeats itself here.

I do not want to see BTC close back below $70,000, the 200-day SMA, or especially the 200-week SMA. If the first two happen, it would be a big warning. If the third one happens, the bulls are toast and this was just another bear market rally.

The Bigger Picture

The thing to remember is that if the bottom is in on Bitcoin, there is a long bull market ahead of us. It should go much higher over the next couple of years.

There will be deep pullbacks. There will be boring, choppy periods of consolidation. There will also be extremely fun bullish runs where Bitcoin absolutely takes off.

If the bottom is in, we would simply be in the first wave of the next larger push higher.

There is so much time to gain exposure, and there will be all kinds of opportunities and trading setups along the way. We do not need to chase Bitcoin here just because it starts moving higher.

For me, the plan is pretty simple.

I will be selling IBIT puts along the way, buying IBIT shares if we drop down into my buy zone, and trading around the Bull/Bear Line in case momentum really starts to pick up.

I want more exposure, but I also want to take advantage of the volatility that Bitcoin is almost certainly going to give us along the way.

The goal is not to perfectly catch the bottom or sell the tops. The goal is to participate in the heart of the next bull move while mitigating risk.

Bitcoin 3 Day Chart

So far, the market has held exactly where it should have.

SPY touched back into its prior all-time high at $760.40 on Tuesday and bounced tentatively on Wednesday. QQQ did not quite fill its lower gap at $701.59 and just missed the 100-day SMA, which is pushing higher each day and is up to $704.34 right now.

SPY Daily Chart

I am still totally open to a gap fill, but I would rather we do not get a solid close below the 100-day SMA on QQQ. If we do close below the 100-day SMA, we need to regain it the next day. Otherwise, things could get dicey for the bulls.

While the market is not doing much as a whole and is moving incredibly sideways from a zoomed-out perspective, it is holding many of the key supports that it needs to. That means, for now at least, I do not see any real reason to be overly bearish, yet.

In fact, the risk/reward for many of these 100-day and 200-day SMA setups is fairly solid.

QQQ at this level does have a lot of overhead resistance that it will have to push through, but it offers pretty solid R:R considering that below the 100-day SMA, the short-term bullish thesis starts to break down. The main overhead target is $729.28. Keep in mind there is still a gap at $713.14, which may act as resistance.

QQQ Daily Chart

We seem to still be in a rotational market where we see software weak and AI strong. Something has to sell of for something else to pump. That’s not the sign of strong bull strength. It leads to an overall choppy market and one that is more difficult for swing trading.

This is a market to buy low and sell high in. It is a great market for credit spreads and a great market for put sales.

When we look at the Trillion Dollar Titans, we saw that NVDA carried a lot of the market today, but once again rejected at the $228 resistance level. We need to see a strong close above that level to signal that NVDA’s retest was simply that, a move that filled its gap and bounced strongly. If that close happens it could be very similar to what happened on the May 29th 2025 earnings report.

NVDA Daily Chart

AAPL came within pennies of its unfilled gap above, a level that I think should act as resistance. GOOGL and AMZN, on the other hand, are sitting right on their key moving averages, the 200-day SMA and 100-day SMA respectively. They have a decent amount of upside and could see nice pops if the market decides to bounce and hold support.

If we break those averages, the short-term bullish thesis is broken, and they too are likely in for more choppy downside price action.

GOOGL Daily Chart

The big name on everyone’s mind right now is AVGO, which just reported earnings in Wednesday’s post-market session.

As of now, it is gapping down about 5%, just below the entirety of last quarter’s price action.

While this is not the biggest gap in the world, from a technical level it will have broken the 100-day SMA, 200-day SMA, and gapped down below 90 days of consolidation. This is coming after a devastating bear gap from the all-time highs.

I would expect AVGO to eventually trend lower down into the low $300 zone if we open below $350. If that happens, it may actually be the best-case scenario for position trades and long term buys.

Buying AVGO off the 100-day SMA would be a solid long-term buy zone with great R:R after a 40% correction. Obviously, anything can happen from here, including it opening green and eliminating all of the bearish activity happening right now.

That would be bullish, at least in the short term, and would have me targeting $389 and the gaps above.

AVGO Daily Chart

All in all, the markets are holding.

We have names like AMZN, GOOGL, and CAT holding on to key support while MSFT, AAPL, and META are grinding higher.

On the AI trade, we can see ASML, AMD, CSCO, TSM, KLAC, SNDK, GEV, VRT, LITE, AAOI, and more all hovering at a key moving average after a decent drawdown. The stage is set for some kind of rally.

The sentiment on this market is terrible from an anecdotal look at X and how traders are feeling. The chop has done its job. It has frustrated traders, worn down bulls, and made a lot of people question whether the next move is ever coming.

The R:R setups are here.

Now it is time to see if the bulls can actually show up, or if September will live up to its name and become another month of the downward chop fest.

If you just looked at the closing prices of SPY and QQQ, you would hardly notice that the markets were even open on Monday. Both indices closed relatively flat.

We saw some bullish signs and some bearish signs on Monday, which makes a lot of sense given that we are currently in a flat and choppy market.

The bullish update is that QQQ has now filled (mostly) its bullish retest gap below, which was created by last Thursday’s quite bullish opening. QQQ also closed with a bit of a lower wick, as did SPY. That is constructive price action.

QQQ Daily Chart

The bearish update is that much of the market closed lower. Broadly speaking, we really only saw semiconductors, cybersecurity, and energy names perform well on Monday. And even semiconductors were not exactly exploding higher. They just weren’t negative.

Big Tech was pretty much unanimously lower on Monday, with GOOGL looking like the worst of the bunch.

I have said it many times, but in order for a strong bull market to carry us into the end of the year, we need to see Big Tech and semiconductors once again resume their bullish trends.

Monday Heat Map

Until that happens, I think the best-case scenario is that we remain stuck in this chop. The worst-case scenario, at least for short-term bulls, is that we see a volatility event into September and October. For position traders, that could be the best case scenario.

The bullish setups are still there, and many are still viable. Perhaps the market has chopped long enough and frustrated enough bulls that it is finally time to move.

I know I have felt frustrated throughout August when some picture-perfect setups failed to follow through. But I also know that is the name of the game. The market will trend again, and for swing trading, a trending market is much easier to trade.

During periods of chop and consolidation, the key is to avoid giving back the gains from the prior bull run.

With everyone assuming we go lower in September, it is certainly possible that the next leg higher takes us to the gap fill at $730 that I have been targeting on QQQ. However, even that move would still be happening within the broader chop zone on QQQ.

Make sure that when the markets start moving again and are once again rewarding great set ups, you have some positions in names you like for the longer term, you have not given back all of your gains from the prior runs, and you still have the mental capital to be active, aware, and ready when the big moves come.

I have said it before, but I will keep saying it:

As long as the key support holds on SPY ($755) and QQQ ($700), I will remain bullish.

But if those levels break down, I am going to get pretty cautious, as the next major buy zone is quite a bit lower on QQQ.

Remember, the market can stay choppy and in consolidation mode just long enough to make traders get bored and quit. And that is often when the next move happens.

Oil prices, tariffs, political shenanigans, war, money printing, inflation, and circular financing throughout the AI ecosystem are all influencing market decisions right now and contributing to a high level of uncertainty.

So far, the QQQ has been stuck in a choppy, sideways corrective market since June 4th, or roughly 89 days. The last major period of consolidation lasted 151 days before we finally found a low into March 2026.

QQQ Daily Chart

Historically, this type of chop on the QQQ tends to occur after periods of meaningful market appreciation. In 2025, the QQQ chopped for 151 days after gaining 58% in just 205 days. In 2023, the QQQ chopped and pulled back for 99 days after a 50% run in only 204 days.

This year started with one of the most bullish moves we have seen in decades, with the QQQ gaining 34% in just 65 days without so much as a meaningful dip along the way. A move like that needs time to be digested by the market, and that is exactly what we are seeing right now.

The names that created that massive move are still consolidating, and the market is still trying to determine whether those gains were justified and, more importantly, whether there is still meaningful upside left in the tank.

Bulls Can’t Hold Any Momentum

Following Warsh’s speech on Friday, selling pressure increased and drove the markets lower, particularly AI-related technology and semiconductors.

NVDA broke down below its earnings candle, which is not what you want to see if you are looking for immediate upside in the markets.

Interestingly enough, AAPL, GOOGL, MSFT, and AMZN showed strong relative strength on Friday and almost appeared to be treated as safe-haven plays within technology. The question is how long that can last.

With the amount of money GOOGL, MSFT, and AMZN are spending on AI infrastructure and capital expenditures, I am not sure the market will continue to view them as safe havens if we actually see a meaningful volatility event.

AMZN Daily Chart

AAPL is a little different. They continue to print enormous amounts of cash while keeping capital expenditures relatively controlled, which could make them a more defensive name if the market starts to experience a broader risk-off event.

$700 Is THE Level to Watch on QQQ

The key level to watch from here on the QQQ is $700. This is where the 100-day SMA and the gap fill from the August 4th gap both reside.

Since last Thursday’s gap up out of the AVWAP pinch we had been watching has now failed, it is likely that $700 will be tested.

Whenever you see a solid bullish setup fail, it is a reason to become a little more cautious. When you see multiple bullish setups fail in succession, that is something that needs to be factored into the trading plan.

That is exactly what we have seen throughout the second half of August. There is clearly some fear looming in the market right now, and the bulls have not been able to regain control.

The QQQ and SPY still have the more bearish setups available to them, including the possibility that we are entering a C wave lower that could take us to or below the July lows.

What I find particularly interesting is that SMH and SOXX are already showing this setup, and both have broken below their 100-day SMA. That lends additional credibility to the possibility that this bearish scenario could play out.

SOXX Daily Chart

The AI Trade Needs to Hold Up

Memory names like MU and SNDK have held up relatively well, but even they have versions of this same count that could begin playing out.

When you look at the entire AI stack as a whole, a large portion of the sector appears to be forming some variation of this pattern.

One of the best examples I found is MRVL.

Looking at the chart, we can see that MRVL moved vertically lower throughout June and July before forming a choppy, messy uptrend. Then, on Friday, the stock gapped down and began another potentially vertical move lower.

MRVL Daily Chart

This is a pattern we are seeing across many areas of the AI trade.

The market needs big tech and AI to play ball if we are going to see a meaningful move higher into September and October. However, that scenario would go against historical seasonality, as September has traditionally been one of the weakest months for the QQQ, with the index finishing the month green only about 48% of the time.

The good news is that if we do sell off and create a larger ABC corrective pattern, it could ultimately set up the seasonal trend of finding a low into October and then having a strong November.

For now, I am watching AAPL, GOOGL, and AMZN closely to see whether Friday’s candles hold during this period of weakness. I am also watching the $700 level on the QQQ.

If those stocks begin breaking down and QQQ loses $700, I will shift toward being fully hedged and assume we are likely entering a much larger C wave lower.

The market remains in a choppy corrective environment. This has become an environment to do less, be more conservative, and protect the gains made earlier in the year.

Better trading conditions will come. During this period of chop, I will look to buy quality names lower rather than chase breakouts higher. For now, I am largely ignoring breakouts until they prove they can actually work and follow through.

The market does not owe us a trade, and there is no reason to force one in an environment like this. Sometimes the best trade is simply to wait. I think it makes sense to respect the risk, protect capital, and let the market prove to us which direction it wants to take next.

NVDA carried the market higher as it blew away earnings on Wednesday and closed up 8.74% on Thursday. It filled its overhead gap, made a new relative high, and is now inching closer to its all-time highs.

Thursday’s earnings candle also had the largest bullish volume of the year, so this is a candle we absolutely do not want to see NVDA close below this week or next.

While this was a gap and go, it would be perfectly healthy for NVDA to chill, consolidate, and even retest Thursday’s candle slightly. In fact, the best-case scenario would be something similar to what PLTR did after its monster earnings candle. A retest of Thursday’s earnings candle followed by another push higher.

If NVDA continues to run, I think $265 is the low-end target for this move, with an upper target into the low $300s. If NVDA reaches $300 per share, its market cap would be roughly $7.25 trillion, which is absolutely wild to think about. But the technicals are laying out a path for it to happen, and everyone thought $5 trillion was nuts too.

As of right now, the setup on NVDA is a double bottom off the 100-day and 200-day SMAs, followed by a solid gap and go that closed with a high-volume bullish candle near the highs. A clean breakout into new all-time highs would put those upper targets into play and could also bring the AI trade back into the bullish swing once again.

NVDA Daily Chart

QQQ Is Doing the Right Things

QQQ just did the exact thing I have been wanting it to do. Held key support and gapped higher.

QQQ Daily Chart

On Monday, I wrote about the likelihood of a durable low forming soon because QQQ had just printed seven bearish candles in a row. Check out that whole thesis below.

Assuming Thursday’s candle does not get Warshed out by Friday’s Jackson Hole speech, the path of least resistance is higher, for now.

If the AI trade can join in on the bullish fun once again, we could be setting up for a solid September. There are so many AI names sitting right on their 100-day SMA or another key moving average, seemingly waiting for a catalyst to send them higher. Money is still rotating out of AI and into other areas like software, metals, and Bitcoin, but the market really needs the semiconductors and the Trillion Dollar Titans to join the party if we are going to get a sustained rally back to new all-time highs.

I know the market is down on the hyperspenders as a whole, but if NVDA keeps grinding higher, I think the AI trade could start getting some life back into it.

GOOGL is very close to its 200-day SMA and is holding extremely strong around $338, which is the 50% gap fill from the July 31st gap. As long as most of the big tech names continue to hold their key supports instead of breaking down, that should be enough for the bull thesis to play out.

GOOGL Daily Chart

AAPL looks like it wants to fill its overhead gap at $329, while MSFT continues to hold up and grind higher with some nice relative strength within the software trade. AMZN looks weak but is coming into a key support level. And META’s chart is hardly worth me even looking at these days. It looks like a downward-sloping EKG.

AAPL Daily Chart

Cybersecurity Continues to Lead

The cybersecurity sector is still on fire and is arguably one of the hottest areas of the market right now. These names have continued to power higher while the rest of tech has taken a breather over the last couple of months.

CRWD and OKTA both hit new all-time highs on Thursday following their earnings reports, while FTNT, PANW, NET, and ZS all had huge days in sympathy.

I will be watching for consolidations and continuation setups across all of these names, but keep in mind that they are getting pretty extended. Tighter stops and trailing stops using short-term EMAs can be useful here to help mitigate risk.

NET is one that I think should eventually join the others at all-time highs. My target is actually up into the upper trendline around $375, with an upper target of $421.

As long as the pivot from Wednesday holds, NET should continue grinding higher and making higher highs and higher lows.

NET Daily Chart

Overall, Thursday was a big day for the bulls. NVDA delivered the catalyst the market had been waiting for, QQQ finally broke out of its recent string of bearish candles, and several areas of technology are showing strong set ups.

All eyes are on Warsh’s Wyoming Words tomorrow morning to see if we get a full-on stampede or if it’s back to the ranch for the bulls.

NVDA So Far So Good

NVDA is gapping higher on strong earnings, and the broader market is coming along for the ride. We are also seeing strong gaps higher in CRM, CRWD, OKTA, and VEEV, so tech is having a very strong post-earnings reaction across the board.

It is possible this is the momentum we have been waiting for to finally break us out of the sideways malaise and push QQQ and SPY back toward new all-time highs.

I have been bullish and buying in this recent dip over the last several days of sideways action, patiently waiting for this next push higher. As long as QQQ can hold the current gap above the range of the last five trading days, I think we should continue moving higher, with the unfilled gap at 729.27 as the next major target.

It is possible we reach that level this week or early next week, especially if Friday’s Jackson Hole Summit is favorable for equities.

QQQ Daily Chart

I have to admit that NVDA is the king of the gap and crap.

We really want to see follow-through tomorrow to eliminate the risk that this gap higher simply becomes exit liquidity for the bulls. A strong earnings reaction is great, but if buyers cannot maintain control once the market opens, this could quickly turn into another failed gap.

NVDA gapping above $215 is a good start, but the bulls need to show strength on Thursday and avoid completely giving back the move. If NVDA gaps up into $224 at the open, that will be an important resistance level to watch.

I will be watching the price action closely to determine where I want to take profits on my post-market trade that I featured in the Swing Trade Room. I bought NVDA at the 100-day SMA in the post-market session once price had stabilized, so now the focus is on managing the position and seeing whether the bulls can turn this gap into a sustained move higher.

NVDA Daily Chart

Jackson Hole Is the Next Big Test

In my opinion, Jackson Hole could be just as important as Nvidia’s earnings, if not more important.

Liquidity is critical for a raging bull market, particularly when it comes to growth stocks. We need to see that the Fed remains willing to support favorable liquidity conditions and is not preparing to tighten.

If we get a favorable message from Warsh on Friday, that could provide the additional fuel the market needs to finally break out of this extended sideways consolidation.

For now, the setup remains bullish. We have the catalyst, we have improving momentum, and we have a market that is already positioned near all-time highs. The key now is seeing whether buyers can maintain control and turn this breakout attempt into a sustained move higher into new all time highs.

SPY Daily Chart

SOXX and the AVGO Setup

SOXX is also trying hard to gap back above the 100-day SMA, which would be a bullish development for the semiconductor and AI trade.

Meanwhile, AVGO has been absolutely slaughtered over the last several days, nearing earnings with nine consecutive bearish candles. Interestingly, I can see AVGO potentially setting up similarly to what we saw with MSFT during its last earnings report.

AVGO is pushing into a new low following a massive decline that already took out previous lows. The fact that it is below the 200-day SMA and essentially below every major support level on my chart is not ideal. The one major level still standing is the Anchored VWAP from the 2025 low at $331.68.

If AVGO drops into that area, it would create some very interesting confluence with the gap from early March 2026. That would be a zone where I would be interested in looking for bullish action.

If that level fails, the next major area I am watching is the 100-week SMA around $295, which continues to creep higher.

I would actually love to see AVGO reach the 100-week SMA. From an Elliott Wave perspective, it would create a symmetrical correction where the A wave is approximately equal in length to the C wave, potentially signaling the end of a much larger corrective structure.

All in all, AVGO is a stock I want to keep a very close eye on. There could be opportunities for both short-term trades and longer-term positions if it reaches these key levels and gives us the right price action.

AVGO Daily Chart

Once again, those two juggernauts could decide the fate of the market.

NVDA earnings are Wednesday, and if we see a disappointment, it could drag the entire market lower. NVDA earnings have not been all that exciting for the bulls for quite some time, and I am concerned this time could be no different.

Then on Friday, Kevin Warsh will speak at Jackson Hole. His comments could have a meaningful impact on the market, especially with the anxiety we have been seeing around the bond market lately.

All in all, this week is unlikely to disappoint anyone looking for an uptick in volatility.

NVDA Daily Chart

QQQ and the Seven Bears

I mentioned above that QQQ has now printed 7 bearish days in a row. In the video above, I go through every time this has happened over the past decade and look at what happened on the 8th candle.

There have only been 5 instances, and every single time, the result was either a durable low or we were only a few days away from one.

If QQQ simply cascades lower from here, we would be a major outlier. That gives me one more reason to look for a bullish setup from this area.

The risk-to-reward is attractive, especially at the 100-day SMA. We have roughly 10% upside to a new all-time and the $770 fib level versus about 1-2% downside using a break below the 100-day SMA as the stop.

QQQ Daily Chart

The 2020 Seven Bears example is particularly interesting.

We saw a massive run higher in 2020, similar to what we have seen in 2026, followed by a consolidation and another steep push higher that failed to make a new high. That was followed by the 7-bearish-candle pattern we are seeing now.

In 2020, QQQ did in fact break down and dropped into the 100-day SMA, which was just below price at the time, very similar to what we are currently seeing.

I am not saying history has to repeat, but the setup is interesting enough that I want some exposure.

Check out the video above for a deeper dive into QQQ, Bitcoin, HOOD, and more.

QQQ Daily Chart 2020

As of Friday’s close, SPY, QQQ, SOXX, Bitcoin, and Gold, all wonderful assets that I actively trade, have very solid key levels of support below the current price. As long as those levels hold, the charts remain bullish.

There is not a lot of reason to micromanage above those levels right now. This trading environment has been tricky, and many setups that look clean and perfect have been failing. When that happens, I like to step back, look at the bigger picture, map out the key levels where my thesis fails, and focus on the trades with the best risk-to-reward.

QQQ Daily Chart

NVDA Earnings Could Move the Market

With NVDA earnings coming this week, we could see some big movement in both SOXX and QQQ.

NVDA has recently retraced its breakout and is now back at its old resistance. We will find out very soon if that old resistance can become new support. NVDA has filled 50% of its August 5th gap and is currently holding the Anchored VWAP from the recent low. It also has a gap fill above at $224.

NVDA loves to gap up and fade, so if it can hold $212 and earnings give us a nice gap into the $224 area, I would not be surprised to see a gap up that eventually gets faded. NVDA is the king of the gap and crap.

Even if it fades for a while, as long as NVDA holds above the 100-day SMA, I still see a viable path toward new all-time highs.

On the chart below, assuming we don’t get crazy price action between now and earnings on Wednesday, I think a gap into the green box would be pretty bullish and could start the grind toward $260 and potentially higher.

A gap into the red box is more likely to produce a gap and crap setup. A gap below the 100-day SMA would be a warning sign and would likely drag on tech and the AI trade as a whole.

NVDA Daily Chart

The market needs AI, semiconductors, and tech to wake up and start pushing higher if we want to see a renewed bull market. There have been several moments where it looked like the stars were aligning for the bulls, only for gaps like we saw Tuesday to derail things.

GOOGL, AAPL, MSFT, and AMZN have all been stuck in ranges lately, and whichever way they eventually break will likely have a significant impact on the market as a whole.

GOOGL is at least trying to push higher in the short term, and it has the 200-day SMA just below acting as support. If that 200-day SMA breaks, it would be a big deal, and I will be fully hedged on my GOOGL positions.

GOOGL Daily Chart

HOOD Continues to Stand Out

While much of tech is trying to decide where it wants to go, there are some names looking pretty strong. HOOD is one of them.

After a failed gap on BULL’s earnings, HOOD decided to gap right back up and this time run higher. If you watched my HOOD video, you know that I remain bullish on the stock as long as the 100-week SMA holds.

I think HOOD could still double from here based on the pattern that is setting up.

This trade was a favorite in 2025, then saw a massive drawdown that wrecked many of the late buyers. Since the lows, HOOD has been making higher highs and higher lows throughout 2026.

Now, it needs to see a strong vertical move higher, and if we get that, that will confirm my bullish count.

Short-term dips are buyable as long as the 100-day SMA and 200-day SMA continue to hold. If they break, I will become more cautious, but there is still a bullish count that can simply extend and take a little longer to play out.

And if the low is truly in on Bitcoin, that should be another major tailwind for HOOD.

For now, I am staying focused on the big picture, respecting the key support levels, and letting price tell us what comes next.

HOOD Daily Chart

The last 4 days of price action have been very constructive, and we are now seeing the kind of vertical move higher that we haven’t seen since the bear market began at the end of 2025.

Now, we want to see a choppy correction that holds the 200-day SMA. If that level breaks, it would be the first major warning that this was not the low that everyone thinks it is.

Bitcoin loves to run without giving people much time to get on the train, so I’m watching for shallow pullbacks before the next move higher.

The big confirmation levels are the Anchored VWAP from the all-time high at $78,906 and the 120-SMA on the 3-day chart at $82,272. If BTC can close solidly above both, it would be a very good sign that the bear market is behind us.

With this vertical move off the bottom, my overall plan is to add into weakness as long as Bitcoin holds the 200-day SMA. This worked extremely well in 2022.

If BTC eventually reaches massive targets like $250,000+, getting in at $75,000 versus $65,000 won’t make the biggest difference. The same was true in 2022. Getting in at $20,000 versus $25,000 wasn’t the important part. The important part was making sure key supports held on each dip, corrections remained overlapping, and bullish advances stayed strong and vertical.

On the equity side, I think QQQ and SPY are getting into some very strong support zones. We could go a little lower, but as long as SPY holds $753 and QQQ holds the 100-day SMA, I’ll remain bullish and continue buying the dip.

I bought SOXX on Thursday after it reached the 100-day SMA and filled its gap. SOXX has a great history of finding support at this key moving average, and I want to be long in case this is another example of a prime buying opportunity.

I go over all of this and much more in detail in the video above. Check it out!

SOXX Daily Chart

Sideways Day in the Equity Markets

SPY gapped up and filled its overhead gap from Tuesday before selling off. Essentially, SPY retested the retest gap. Now we see whether we continue moving in the direction of Tuesday’s gap, lower, or if the bulls can take out Wednesday’s high and get back to grinding higher. If we continue lower, there is a major support zone at $761 to $758 on SPY. As long as that zone holds, I view this as nothing more than a small correction after a very solid impulse move, and I would expect that dip to be buyable.

SPY Daily Chart

If we instead push higher and take out Wednesday’s high, I can use Tuesday’s low as a pivot for managing risk and tentatively assume the bulls are back in control. For now, there is nothing on the chart that makes me want to get overly bearish. We had a strong move higher, and the market is simply working through a short-term pullback. The key is whether those big support levels hold.

QQQ is showing a slightly different picture. Both SPY and QQQ gapped higher on Wednesday, but QQQ sold off harder, made a new low for the week, and then bounced almost perfectly off its 50-day SMA. This setup looks very similar to what we saw on July 24 and July 27. In that instance, we saw another two days of downside before the market found its footing and began a sustained rally higher.

If we see another leg lower, I will be watching closely for a similar response at the key support levels on both SPY and QQQ. On the other hand, if QQQ can gap higher and reclaim the opens from Tuesday and Wednesday, around $721, I will be looking for follow-through similar to what we saw on March 31 and July 30. That would be a much more bullish signal and would suggest the buyers are ready to step back in.

QQQ Daily Chart

Treasury Injects Liquidity

The Treasury announced that it will significantly increase its buybacks of longer-term government debt. Starting September 9, the Treasury will increase the size of its buyback operations in the 10-to-20-year and 20-to-30-year parts of the bond market from $2 billion to at least $4 billion per operation.

This may sound a lot like quantitative easing, but there is an important distinction. The Treasury is buying back some of its older bonds using cash it already has. The Federal Reserve is not creating new money or expanding its balance sheet, so this is not QE or “money printing” in the traditional sense. What it does do is create additional demand for longer-term Treasury bonds, which can help push bond prices higher and yields lower.

And that is exactly what we saw.

Yields Fell, the Dollar Dropped, and Bitcoin Popped

The 30-year Treasury yield dropped from 5.285% to 5.21% after recently reaching 5.337%, its highest level since 2007. The 10-year yield also fell from 4.71% to 4.66%. At the same time, the dollar had a pretty bearish day, with DXY dropping about 0.8% to 98.86.

DXY Daily Chart

That combination is bullish for risk assets. Lower yields tend to be supportive of stocks and other risk assets, while a weaker dollar generally helps assets priced in dollars, including Bitcoin and gold. The weakness in the dollar also confirms the failed breakout we saw in June and July. If DXY continues to chop sideways or move lower, that would be a favorable backdrop for risk assets.

After spending roughly seven weeks stuck in a range, traders had built up a pretty large short position. When BTC started moving higher, those shorts were forced to buy back their positions, accelerating the bullish move. Roughly $1.9 billion in leveraged positions were liquidated on Wednesdays long day bull candle. Now we need to see if it can close above the 200-day SMA, which will be the first sign that maybe this time there is something different.

BTCUSD Daily Chart

Gold saw a similar move, jumping 2.7% to around $4,528 per ounce, its highest level since early June. We had falling yields, a weaker dollar, a large amount of short positioning, and renewed concerns around government debt and inflation all hitting at the same time. When you get that many factors lining up in the same direction, markets can move very quickly.

Gold Daily Chart

Not QE

I do think it is important not to confuse the Treasury buybacks with another round of QE. The Treasury is using money it already has to buy bonds, while the Fed is not creating new bank reserves or expanding its balance sheet. The liquidity impact is therefore much smaller than what we would see from an actual Fed balance sheet expansion.

The program is also temporary. The current plan runs through the Treasury’s refunding quarter, which ends November 4. At that point, we will get another look at whether these larger buybacks will continue. If Treasury demand helps push yields lower but yields start climbing again after the program ends, some of the recent tailwind for Bitcoin, gold, and other risk assets could fade.

For now, though, the setup is pretty straightforward. Lower yields, a weaker dollar, and a crowded short position created a pretty powerful combination for BTC and gold on Wednesday. The bigger question is whether this is the beginning of a sustained move higher or simply another short-term burst after a long period of consolidation. From here, I will be watching the key closes to help answer that question. The first major level I am watching is the 200-day SMA on both gold and Bitcoin.

Monday brought some more weakness into the markets. QQQ closed with what amounts to an inside candle, while SPY sold off a bit and closed back below last Thursday’s bullish candle, the one that looked like it might be the start of the next leg higher. Looks like we’re going to have to wait a little longer for that breakout.

The good news: I still think the highest-probability outcome here is a slight pullback that holds the key support levels below. There’s a small chance the recent run in QQQ and SPY was just a B wave, and that we’ve still got a C wave lower coming that takes out the old low. However, until we actually break support and start seeing a vertical five-wave drop, I’m treating that as a low-probability scenario, not the base case.

SPY Daily Chart

Worst case, in my mind, is we drop back toward the prior all-time highs and then find our footing heading into the September and October. I’m not married to that narrative at all. If price action tells me something different, I’ll change my mind.

And honestly, I call that the “worst case,” but for a lot of traders it might actually be the best case. Instead of the lockout rally we got in April and May, we might get actual retests this time around. That’s good news if you’re not as allocated as you’d like to be, since a dip into September could be exactly the entry you’ve been waiting for.

QQQ Daily Chart

Semis Still Showing Strength

Semis and the AI trade continue to hold up well. My account was up decently on the day, and at one point intraday it was up quite a bit more than that.

That’s part of the problem, honestly. The bulls keep struggling to hold onto gains. We keep watching selling erase much of the day’s progress by the close. The strongest names are still performing, but anything short of the best few stocks are having a hard time holding their momentum.

SOXX Daily Chart

Bond Yields, A Looming Concern

A big thing weighing on this market right now is long-dated yields. On Monday the 30-year hit 5.31%, its highest level in 20 years.

That’s not a rate the stock market can just ignore forever. If yields keep ripping higher, they’re going to pressure equities as the risk-free rate climbs. Future earnings get discounted harder, bonds start pulling capital away from stocks, borrowing gets more expensive for companies and consumers alike, and high-growth names in particular start feeling it most. Financial conditions tighten across the board.

The market can handle higher yields. We’ve seen that already, with yields and stocks both climbing since the March low. But if the 30-year keeps ripping like this, stocks will eventually have to take notice.

30 Year Bond Yields

Bitcoin Still Has Work to Do

This is kind of the moment Bitcoin was built for. It was supposed to be the escape hatch from an inflationary, money-printing fiat system. And yet the chart still looks pretty weak.

Bitcoin’s trying to reclaim the 200-day SMA, but it’s got a lot more work to do before I’d call this a real bottom. It would also be bucking a lot of its own history if this turns out to be the final low. Historically Bitcoin has fallen roughly 30% below the 200-day before major bottoms actually are formed. From where we sit today, that would mean Bitcoin would eventually see at the $45,000 level.

Anyway, for now at least, Bitcoin still trades like a risk asset, not the risk-off hedge against inflation and money printing it was supposed to be.

The use case gets talked about out every cycle. It’s been “its big moment” since 2020, and we’ve had several boom-and-bust cycles along the way. Until that actually changes, I’m letting the technicals call the shots.

BTC Daily Chart

INTC Setup

One name I’m still watching closely is INTC. Intel is consolidating after getting rejected off the AVWAP from the all time high. It needs to close back above that AVWAP, sitting around $107.10 right now, and if it can, I think the overhead gap fill is easily in play.

I don’t want to see is a close below the 100-day SMA, which keeps creeping higher, allowing for tighter risk mitigation each day. If it closes below the 100-day and can’t reclaim it the next day, the bullish thesis is off the table for now, and I’d start looking for a drop back into the $79 to $70 range. I am currently long and looking to add if we can break out above $107.00. I will trail out under the 100-day SMA.

INTC Daily Chart

The markets pulled back ever so slightly on Friday, with SPY and QQQ closing nearly flat on the day and the week. After two rip-roaring bullish weeks, some rest and consolidation makes a lot of sense here. As I keep saying, the path of least resistance remains higher. The bulls are in control, and dips are buyable as long as key support levels hold.

SPY Daily Chart

For SPY, the key support level is the prior all-time high around $760. A pullback to $754, right around that old resistance turned new support, would also be perfectly healthy. I would not want to see SPY start taking out $746, especially on heavy volume with gaps lower. That type of vertical downward price action would be a warning sign.

I want any pullback we get to be choppy and meandering, where we can still confidently say the bulls are in control and this is simply profit taking.

For QQQ, the key level is $701. That is the gap fill and island reversal level, and if it takes a few weeks to get there, it should also line up with the 100-day SMA. I expect the 100-day SMA to creep up toward that level before the end of August, giving us a very solid line in the sand to watch throughout the month of September. The $700 island reversal level and 100-day SMA should be the critical support zone for QQQ.

QQQ really looks like it wants to join SPY at all-time highs. As long as that support holds, I will continue buying dips if they come.

QQQ Daily Chart

Trillion Dollar Titans

When we look at the Trillion Dollar Titans, which are huge drivers of QQQ, we have seen a pretty good amount of weakness over the last week or two, yet QQQ has continued to hold up well.

AAPL, GOOGL, AMZN, and AVGO have all been sold off hard and look like they are at least due for a relief rally. If we get another week of weakness in these names, many of them will be moving into major buy zones and support areas. That makes it less likely that even a modest QQQ pullback turns into a major breakdown.

AMZN Daily Chart

Meanwhile, the semis and AI trade are trying hard to regain leadership. If that happens, we could push higher again despite the weakness in some of the Trillion Dollar Titans.

Past leaders like SNDK and MU are showing a lot of strength. All last week I was making videos and articles about the prime setups in the AI space, and we are now starting to see some follow-through.

SNDK Daily Chart

AMD, STX, SIMO, and AAOI all closed the week with a bang. Even TXN had a decent day Friday and held its key support at the 100-day SMA.

Now I want to see follow-through. I do not want to see failed breakouts across these names, or I will start cutting positions and walking away.

For example:

• AMD: Should not break back below $480

• SNDK: Should not break back below Thursday’s candle around $1,300

• STX: Should not fall below $850

• AAOI: Should not fall below $128

If these levels break, it would negate the short-term bullish thesis and tell us the bull case simply needs more time to develop.

STX Daily Chart

The Market Setup

Thursday delivered the follow through that Wednesday’s gap set up. QQQ pushed higher and closed up 1.16% on the day, decisively breaking out of the six day flag pattern it had been sitting in. SOXX and SMH showed strength midday but gave back much of those gains into the close.

QQQ Daily Chart

For this market to put together another strong leg higher, tech bulls need to show up in force and push into new all time highs. I think QQQ is headed there from here, and my first target is $$764. That level along with my higher targets of $770 and $800 are not out of reach if semis and the AI names can clear their resistance, hold it, and keep grinding higher.

Names like INTC, TSM, MU, LRCX, and SNDK have already closed back above their key resistance levels. Meanwhile several of the AI names, MRVL, ARM, AMD, STX, and AAOI, are still sitting just below theirs. If memory, semis, and the AI group as a whole can break out together, that’s a great sign for this bull market. If this breakout turns into a trap and we close back below those levels, I’d expect at the very least more chop.

AMAT gapped down on earnings Thursday evening, which could weigh on the space a bit. As long as the 100 day SMA holds, I still see it recovering and moving higher with the rest of the group.

SNDK Daily Chart

Cybersecurity Continues to Hack its Way Higher

In this market, gaps and relative strength matter. Cybersecurity has been one of the hottest groups around. CRWD, PANW, FTNT, NET, ZS, and S have all shown incredible strength over the past few months, even while most of tech was getting hammered.

I’m already long NET and watching several of the other names for a pullback or a breakout setup to get long, depending on how each one is shaping up. I took and featured a great trade on CRWD near its July lows and am fully out of that position now, but for anyone still holding, the next target is $243, the 1.618 extension from the last pullback.

CRWD Daily Chart

FTNT: Still Upside Despite Extension

For a name in cyberspace that still has a decent risk reward setup despite an enormous run over the past several months, I’m watching FTNT. It’s a solid fundamental story, and after its breakaway gap in May it went vertical. It pulled back 15% in July and has since formed a tight pennant inside its earnings candle. A break in either direction here could be tradable, but the trend and momentum are clearly with the bulls. With earnings out of the way, a breakout could push FTNT toward $187, then $200.

FTNT Daily Chart