Friday was a great follow-through day for the bulls. Wednesday’s candle held support, Thursday gave us a gap up, and Friday finished the week strong. The market has been holding up despite all the macro worry and noise. Now it looks ready to make another push higher, just like we saw at the end of July into early August.
I've been excited about a breakout from this chop before, and perhaps this time is just another trap. But the volume on this push is significant. Either way, the risk/reward on a lot of these setups is stellar, much better than anything we've seen since the July lows.
I’ve been targeting the $729 gap on QQQ for a month now, and it looks like it should finally hit this week. If that plays out, I think SPY could push into its trendline around 770 before pausing, then continuing on to new all-time highs into October.
QQQ Daily Chart
Trillion Dollar Titans
My recent trades from this newsletter have been printing. NVDA is very likely to hit Target 2 on Monday or early next week. From there, I’m targeting all-time highs on NVDA.
The other big tech name with great R:R right now is AMZN. AAPL and GOOGL have already hit their short-term targets. META still needs to pull back a bit more, or break out above $686, for me to get interested.
TSM and MU are also looking really solid if we want to round out the Titans I like right now. MU has a nice path to the unfilled gap above at $1,124, but it has about equal downside to the 100-day SMA. The R:R from here isn’t awesome, though it still looks great for anyone already long.
Back to AMZN. If you’ve been following this newsletter for a while, or you’re in my current MasterClass, you know there’s a ton of confluence in this area:
100-day SMA
50% gap fill from the earnings gap
Double bottom neckline
Channel midline
50% retrace of the weekly candle
Back above the AVWAP from the June lows
If AMZN can break back above the 100-day SMA, I think it has a nice bullish path to at least $263, about $10 above Friday’s close. This giant has been a bit of a laggard. But the gap has held up instead of fully filling to the 200-day SMA/gap fill zone, which tells me bulls are eager to get long and don’t want to let it drop into those levels. If we do drop down there without breaking the 100-day SMA, that’s fine with me. My long-term buy zone sits down in the low 200s.
Best case scenario: a small gap just above the 100-day SMA on Monday. That would make for a great entry, or a spot to add to current trades, targeting a move up into prior resistance in the mid-$260s and beyond.
AMZN Daily Chart
The AI Stack
The market has been pretty anti-AI-names since June 4th, when QQQ topped. But it looks like money is starting to rotate back into the sector, and we’re seeing a lot of great setups there.
INTC looks quite solid here from an R:R standpoint. Clear target at the gap fill around 121, with a clean bullish invalidation under the 100-day SMA/AVWAP around $103. That kind of R:R is appealing, and it’s not just showing up on INTC.
INTC Daily Chart
AMAT, which I featured last week, has a similar setup, as does LRCX. These are some of the more beaten-down AI names, along with AAOI, which is trying to regain the 200-day SMA. The gap above becomes the target from there, with the 100-day SMA as Target 2.
AMAT Daily Chart
Overall, there are a lot of great setups to choose from heading into next week. I'm already long the market and long several AI names in anticipation of this move. I'll be adding to a few this coming week if we get gaps and confirmation that the next couple of weeks stay as bullish as they currently look. If we get a retest of last week's move, I'll add into key levels and make sure key supports hold.
Keep in mind the whole AI stack tends to move together, so if you stack a ton of risk on similar names, you'll likely either win big on all of them or lose big on all of them. Size accordingly.
This Week’s Watchlist (TLDR)
AMZN: long above the 100-day SMA
META: like it back into its 100-week SMA and 200-day SMA
TSM: long here as long as it holds $420
INTC: long into the gap fill above, as long as it holds the 100-day SMA
LRCX / AMAT: like these off the 200-day SMA
MU: targeting $1,124
SIMO: like it here if it breaks above $273
AAOI: long as long as it holds $87.52
ZS: long into the 100-week SMA, as long as it holds the 200-week SMA
PLTR: targeting $200, as long as it holds the recent pivot at $163
SPY: targeting new ATHs
QQQ: targeting the $729 gap fill, then possibly new ATHs
BTC Bull Market Signal
BTC just closed above the 120-SMA on the 3-day chart. That's my bull market/bear market delineation line. As long as it closes above that level on Monday, the signal is confirmed. I think something similar to what happened in 2012 is possible here, where the close above the 120-SMA on the 3-day chart signals the bottom, but we do in fact break back below it at some point before heading higher.
BTC Daily Chart 2012
BTC Daily Chart
