Updates 2:30 AM EST- Friday 4/30/21

Perspective
The headlines at CNBC said:
The S&P 500 closed at record levels on Thursday after blowout earnings results from two of the biggest tech companies in the world: Apple and Facebook.

Technically this is true, but only Facebook surged whereas Apple spiked and dropped pretty quickly.   Under the hood, $SPX $NDX IWM are struggling to rise higher.   They may have to anchor at support one more time to bring in more buyers.

To be clear, there is no imminent crash signal, just suggestions of a shallow pullback and then a resumption of the bullish rise.

Table of Support & Resistance Zones
The S/R table has been partially updated.

​$VXN

Updates 11:18 AM EST- Thursday 4/29/21

Updated S/R Levels

• $SPX $NDX IWM all pulled back as expected.
  
• $VIX $VXN $RVX all spiked as expected but not by much.

We have updated our buy order entry price for Big Bull TQQQ and TNA in Signal Trades.   Here are some updated levels where Big Bull $SPX $NDX IWM may start. 

• $SPX:  4160
• $NDX:  13800
• IWM:  225

Updates 2:30 AM EST- Thursday 4/29/21

​FOMC 
FOMC announcement came at 2 PM EST Wednesday.  Here is an in-depth analysis from Wall Street Journal.

Table of Support & Resistance Zones
The S/R table has been partially updated.

$NDX
In the last few days, even though we tried to enter Quick Bull SOXL during sharp intraday pullback, price still did not manage to rise very much before dropping right through our stops.  There isn't a whole lot of buyers right now at this level.

To be clear, Nasdaq internals and $VXN chart are not showing an imminent crash, or even a major pullback.   But they are showing the possibility of a shallow dip.   

So we will try to be patient and wait for $NDX to drop down and anchor in its green support zone before entering Big Bull TQQQ.

However, if $NDX demonstrates on Thursday on its intraday charts that it has found strong support, we would reconsider higher price level.

​$RVX

Updates 2:00 AM EST- Tuesday 4/27/21

Perspective
$VIX $VXN $RVX charts have not changed that much.  Their main message is that there is no real threat of a crash right now.   And a major pullback is also unlikely.  

So today instead of examining those charts, we are going to supplement with charts of additional ETFs with specific entry strategy.

Table of Support & Resistance Zones
$SPX SPY have been updated in the S/R table below.   All other levels remain the same.

​

$SPX
There is no way to really know right now how the market will react to FOMC announcement on Wednesday. But we can mentally prepare ourselves by determining ahead of time what the low-risk setups would look like for us to enter Big Bull positions.

There are lots of reasons to wait for a bigger pullback to enter Big Bull positions.   Right now there is a bearish divergence between $SPX price and RSI, as shown on its 2-hour chart below.   A slightly bigger pullback will drop the RSI pattern closer to oversold and reset the bearish divergence.

We can see on previous occasions, even if we don't know ahead of time the exact pivot price of a pullback, we can still make out fine with this low-risk setup:  wait  for $SPX to anchor below its 20 and 50 EMA lines, and to drop closer to its 200 EMA line.   

This strategy works because we are in an environment where volatility is dropping generally.

Signal Trades
We recommend trading just Intraday Bull positions ahead of FOMC.   

Below is TQQQ 5-minute chart showing a simple pullback in price to anchor at its 200 EMA green line.  (Use extended-hour chart for more data).    

You can use this type of chart pattern for entering TQQQ TNA SOXL SPXL Intraday Bull positions.   Use a tight stop just below the entry price.   Aim for 3% to 4% gain.

Click here for our latest Buy Targets in Signal Trades.​

Updates 12:00 AM EST- Monday 4/26/21

Perspective
The big event this week is the FOMC meeting which starts on Tuesday, and the announcement scheduled for 2 PM EST on Wednesday.   In preparation, you may want to read this informative piece from WSJ.   Here is the excerpt.

The short-term question for us to ponder is this.   How will the market react this time to the Fed announcement?   Their message won't be greatly different than the last meeting on 3/17.   And stocks sold off for a week after that announcement.   Will they sell off again this time?

We actually hope so.   A moderate sell-off that brings $SPX $NDX IWM down to their green support zones will be a bullish setup.   It will bring in more buyers, which is necessary to get $SPX $NDX IWM to new highs.  

Table of Support & Resistance Zones
$SPX SPY have been updated in the S/R table below.   All other levels remain the same.

$VIX
Let's start today by looking at $VIX.  There is no indication on $VIX chart below of a crash, or even a major pullback.   In fact, $VIX actually is sending out bullish messages.   

Bulls should hope to see $VIX spiking up quickly one more time, and forms a 3rd spiky top above its 200-hour EMA green line.   This would be a bullish setup for $VIX to drop and $SPX to resume rising.

Signal Trades
Between Monday and the announcement on Wednesday, we plan to trade just Intraday Bull/Bear positions, based on the opening setups.    We will post updates either pre-market or at open.

Once $SPX $NDX IWM have shown that they have anchored in their green zones, we will enter Big Bull TQQQ and TNA positions.

Click here for latest Signal Trades.

To Read
We urge you to read this article about risk management and position sizing.  
1% Risk Rule
If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read:
Why 3x ETFs like TQQQ lose money over the long term
If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read:
​The risks of investing in inverse ETFs

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 suggestions.​​​​​​​​​

Click here for latest Signal Trades.

Updates 1:16 PM EST- Friday 4/23/21

XBI
XBI is a biotech ETF.   We sometimes trade its 3x ETF equivalents which are LABU (bullish) and LABD (bearish).   

Below are our thoughts on XBI/LABU.   They formed a low-risk setup on their 5-min charts today so we tested it.   But the setup failed and we got stopped out.  At this point we are going to stay out because you may have noticed the best signals show up at the start of the morning.   Overtrading just whittle down our trading accounts.

Nasdaq A/D: still bearish
In the Nasdaq A/D net issues daily chart below, if the blue 20-day EMA line crosses below the 50-day EMA red line, we may see more bearishness reflected $NDX price.   This is why we don't think $NDX is ready to break out above its orange resistance zone soon.​

Signal Trades
Our best laid plan went awry on Thursday.   Our positions were doing well and gaining some good profit when the capital gain tax announcement suddenly broke.   And all hell broke loose.  

This kind of trading situation is extremely frustrating.   We were saved by being vigorous with our stops.   We made a small profit for the day, but the frustration is still there.   And based on the comments, many of our members feel it too.

We will monitor for low-risk setups pre-market, but we don't want to commit to a particular ETF or direction right now.   This is a choppy market.   And for that reason, we plan to take profit quickly.   

Click here for latest Signal Trades.

To Read
We urge you to read this article about risk management and position sizing.  
1% Risk Rule
If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read:
Why 3x ETFs like TQQQ lose money over the long term
If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read:
​The risks of investing in inverse ETFs

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 suggestions.​​​​​​​​

Updates 5:35 PM EST- Thursday 4/22/21

Sudden reversal today
Many apologies for not being able to post updates this afternoon.   We had to leave the office to take care of an urgent matter.   (Thank you Will for stepping in to answer questions :-)

$SPX $NDX IWM were all happily marching up higher when the news hit at 1 PM.   According to Bloomberg:

The plan would boost the capital gains rate to 39.6% for those earning $1 million or more, an increase from the current base rate of 20%, the people said on the condition of anonymity because the plan is not yet public.
A 3.8% tax on investment income that funds Obamacare would be kept in place, pushing the tax rate on returns on financial assets higher than the top rate on wage and salary income, they said.
The proposal could reverse a long-standing provision of the tax code that taxes returns on investment lower than on labor. Biden campaigned on equalizing the capital gains and income tax rates for wealthy individuals, saying it’s unfair that many of them pay lower rates than middle-class workers.
For $1 million earners in high-tax states, rates on capital gains could be above 50%.
For New Yorkers, the combined state and federal capital gains rate could be as high as 52.22%. For Californians, it could be 56.7%.
This certainly is not good news for the investment community.   And the reaction was swift.   

Keep in mind this is not surprising news.   Most people assume Biden was going to raise tax.   It's a matter of how much and when.   And keep in mind that just because Biden proposed this does not mean that it will get passed in its entirety.   

But there is nothing that the market hates more than uncertainty.   And this introduces uncertainty into the money equation in a big way.   This can potentially affect all kinds of investment decisions, and the ways in which capital gets allocated.   The market does not like this.

On top of that the dark economics clouds have been building up.   Inflation is becoming more obvious each day.   Everyone is anxious about the Fed tapering the liquidity.   And market is acting as if all the good earnings news have already been baked into price.   So what's left to invest but dogecoin?

Trading strategy now
It's a little too early right now to decide how the market will really respond in the next 24 hours.   We urge you not to guess wildly and overtrade here.   That is how trading accounts get blown up.

Regardless of the market mood, bullish or bearish, there will be low-risk setups to test trading positions.   

You will notice that we have been aggressive with the early morning setups, and we will continue to hunt for them early.   But given the current environment, we may tweak our strategy and collect profit very quickly.   

Today was a frustrating day because everything was going so well in the morning and we had nice unrealized gains until the sudden reversal.   Today also was a good example of the importance of finding low-risk setups and treating stop-loss like a car seatbelt.   You don't drive without putting it on.  It certainly saved our money today.

Updates 2:00 AM EST- Thursday 4/22/21

Perspective
$VIX $VXN $RVX all tested their 4/20 highs on Wednesday and did not rise above these crucial levels.   As a result $SPX $NDX IWM all rose sharply on Wednesday.   

Table of Support & Resistance Zones
The green support zones have been updated.

​$VXN
There is a good chance that $VXN will retest the high of 4/21 again on Thursday.   That will be an important indicator to monitor.  If $VXN does not exceed 4/21 high, then it will begin to descend to reach the low of 4/19.   This may occur by next Wednesday in time for FOMC.

IWM
Where IWM retests its 200 EMA green line around 220 one more time is a low-risk setup to test TZA.   However, we don't plan on trading TZA, at least right now.

Click here for latest Signal Trades.

​Updates 10:21 AM EST- Tuesday 4/20/21

$RVX rising
$RVX hourly chart below shows $RVX ready to climb higher, up to 29 possibly.  This is why we decided to exit Big Bull TNA with a loss.   We are looking for a low-risk setup to enter Quick Bear TZA if possible.

Nasdaq A/D: Bearish Divergence
This chart is becoming more bearish looking every day.   Despite the mild price drop on Monday for $NDX, under the hood there were 1872 more declining shares  than advancing shares.   That's a fairly big number.   Sooner or later this bearish divergence will catch up with $NDX.

$NDX
$NDX is very likely to drop down and anchor in its green support zone which is around 13600.   However, if $VXN spikes up to anchor at its 200-day EMA green line, then $NDX may drop as low as its 50-day EMA red line, which is around 13300.

SQQQ
Given this setup, we plan to enter a Quick Bear SQQQ position on Tuesday.   See Signal Trades for buy order.​

$VIX
Just like $VXN, $VIX spiked up on Monday as expected.   Unlike $VXN however, $VIX probably won't rise much higher.   Instead, it may start to go sideway and form a large base like it did in early August and mid November.

IWM
IWM has been a tightly contracted consolidation zone since the start of April.  This is most likely going to become a bullish base from which IWM can rise. 

Our Big Bull TNA position currently has a sell-limit order at 92.5.   However, if IWM TNA continue to demonstrate that they have found strong support above or in their green zones, we will hold TNA.

NYSE A/D
Unlike Nasdaq A/D, NYSE cumulative A/D line has been rising up steadily.   This means that there's still a lot of bullish strength for $SPX.

​$VIX
Just like with $VXN, bulls will want to see $VIX spike up quickly, anchor at one of the EMA lines, and then drop.   This will create a pullback in $SPX to bring in more buyers.