Updates for Monday November 18, 2024

Click here for Signal Trades spreadsheet.

Updates 2:30 AM ET - Monday

The fireworks this week won't really start until after NVDA earnings on Wednesday.  Read here for more analysis of the state of the US market.  Also, don't forget that if Bank of Japan resumes raising rates, the carry trade will suffer substantially and this will have a big effect on US growth stocks. 

​VX key levels
As usual the chart to watch is VIX futures (VX).  Here are the setups to monitor for.  

• Bullish:  VX tries to rise above 17.1 but fails.  This failure means traders are no longer hedging against rising volatility.  This will set up the stage for bullish support in equity.
• Bearish:  VX spends multiple weeks basing around 15.  Strong VX support at this level means there is a growing demand for protection against rising volatility. ​  This is bearish for equity.

The good news for equity bulls is that VVIX (volatility of VIX) weekly chart continues to show its 20-week EMA blue line forming a top above its 200-week EMA green line.  This suggests volatility is likely to go down, at least until that blue line drops below 90.  

NQ 

• Bullish setup:  NQ continues to build a strong base in the support zone 20200 - 20400 ahead of NVDA earnings. This setup and VX forming a top can set the stage for NQ to surge after earnings.  In this scenario NQ can climb from this support zone back up to test R1 at 21340.
• Bearish setup:  NQ rises up rapidly on Monday but gets stuck in the resistance zone 21200 - 21340 ahead of NVDA earnings.  This setup and VX forming a base can set the stage for NQ to drop sharply.   In this scenario NQ can drop to next  support zone at 19800 - 20000.

NVDA - See NQ discussion above

• Bullish setup:  basing in support zone 137 - 140 ahead of earnings.  NVDA can rise up to R1 at 150.
• Bearish setup:  NVDA gets stuck in the resistance zone 148 - 150 ahead of earnings.  NVDA can drop to next support zone at 130 - 132.

SMH - See NQ discussion above.  Keep an eye on SMH for now through this key pivot time because these levels are not distorted by contango.  SOXL directional movements follow SMH, but levels can get weighed down by contango

• Bullish setup:  basing in support zone 237 - 240 ahead of earnings.  SMH can rise up to R1 at 263.
• Bearish setup:  SMH gets stuck in the resistance zone 260 - 263 ahead of earnings.  SMH can drop to next support zone at 230 - 232.

TNA - TNA isn't going to be affected by NVDA earnings as much as tech stocks.    ​​

• S1 support is at 45.  This is a strong level and TNA is likely to bounce from here.  It can rise back up to R1 at 56.6 from this support if VX is supportive.
• S2 support is at 39 - 40.  If TNA can fails to find support around 45, it can drop sharply down to S2.  Then from here TNA may bounce and rise back up to resistance at 50.

Our personal trade plan
Ahead of Friday we wrote: Our 1st plan is to do a quick UVXY trade as VIX VX are about to spike."  This was quite a profitable trade.

With the latest analysis, we are not seeing any low-risk setup yet so no entry for now.
Click here for Signal Trades spreadsheet.

Disclaimer
The information presented here is our own personal opinion. Consider it as food for thought.  We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections.  You are proceeding at your own risk if you follow our trades.​​​​​