Thursday and Friday gave us the bullish setup we’ve been waiting for over the last month, and Monday finally delivered a solid follow through. QQQ closed up 2.77% for its best day since August 4th. The similarities between now and the August 4th candle are stark, and I think it’s likely something similar plays out from here over the next week or two, pushing us into new all-time highs on both SPY and QQQ.
The last two FOMC meetings have produced almost identical moves so far in QQQ: a bear candle below the 100-day SMA, a bullish gap and go the next day, then a big follow through day. Today’s follow through happened on an island reversal gap, just like we’ve seen before.
It’s even possible we gap 1% and some change into new all-time highs on QQQ on Tuesday. If that happens, I’d lock in some solid gains up there.
QQQ Daily Chart
What I find really interesting is that most of the Mag 7 are decently off their highs while SPY, QQQ, and MAGS are near or making new ATHs, in the case of MAGS. That opens the door for a sustained rally if we see the AI stack and the Mag 7 all push higher at the same time.
We really don’t want to see Monday’s candle on most stocks get taken out any time soon. SPY and QQQ should reach new ATHs before filling the gap made on Monday. I think that gap does fill before the end of the year, and it could actually fill in October if the similarities to the past FOMC meetings hold up.
Once again, I’ll use weakness as a buying opportunity. I see no reason in the charts to be bearish right now.
SPY Daily Chart
Bitcoin Bull Market
Bitcoin has now officially closed above its 120-day SMA on the 3-day chart for the second candle. This confirms the bull trend has officially started. We also have 5 waves up off the low. If we get a messy, choppy 3 wave drop after finding resistance around the 100-week SMA, that would be another great buying opportunity and a perfect set up.
For now, unless something drastic changes, in the worst case scenario, I think we might see something similar to the 2011 low, where Bitcoin does end up breaking back below the 120-SMA on the 3-day chart but does not actually make a new low. Back then, price retested the whole impulse move by just under 50%, which Bitcoin loves to do on its initial thrust higher. If we do something similar after stopping at $90,000 and the 100-week SMA, that would take us back to roughly $73,000 to $75,000. That seems very plausible to me.
I use oversold RSI down to 27 and RSI divergence on the BTC daily chart to add to my long term Bitcoin (IBIT now) holdings. We got some great signals so far that nearly bottom ticked the low, and this signal will fire again on the next large retest, which should make for a great buying opportunity. It’s time to set alerts now and patiently wait.
Bitcoin Daily Chart
Thanks again Yates! Been adding to my AMZN position here