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I’m liking this market behaviour a lot!
Yes, I know it’s chaotic, but we’d been warning about unsustainably overbought conditions since mid June, and the good news is that stocks are correcting across the board.
Why is that good news?
Because – in time – things will settle around the areas of higher probability technical levels, giving us the prime opportunities that we like best.
The markets …
Again, just to remind ourselves … since mid-June we’d seen largely overbought conditions accompanied by sub-optimal setups, plenty of whipsaws, false breakouts, and a general lack of tidiness.
That set the scene.
Then we had the unforeseeable catalyst (Crowdstrike) that shook things up, though in reality the indices had already peaked by that time.
The outcome is perfect for us as our favourite setups can now reform from solid bases – both bullish and bearish.
And we’re all about solid bases – typically near Key Levels.
And even during these turbulent conditions I still keep getting feedback of excellent trades from the many lions among us!
See below for Market Outlook.
How to Watch This Video:
The best way to watch this video so you can flip through the charts at the same time:
- Log into the members area: https://members.wisetraders.com
- Click on Platform (top right)
- Click on TV within the Platform (top right)
- Choose “On Demand”
- Play
Market Outlook:
Watch the video for more detail.
Last week I said the SPY and QQQ were likely to stabilize temporarily before further rotation effects.
That temporary stasis lasted four days!
I also said earnings would continue to be a mixed bag, and I would not be taking pre-earnings trades this time around. If you did want to have a go at a pre-earnings setup, only do it on a conditional breakout basis – preferably while watching live. While quality has been in short supply over the past few weeks, we now see why, and this reset will ultimately produce more of the excellent setups that we prefer.
Be patient … this market volatility is not over yet. And being patient is where the big money is made … Watching the chaos while keeping your powder mainly dry. By now with me you’ve seen umpteen times how the best setups form around Key Levels with an abundance of Big Money Footprints present. Now’s the time to observe, knowing you’re in complete control and knowing you’ll pounce when the time is right.
Our market timing is proving to be outstanding yet again. Being good at market timing enables you to swim WITH the tide at the right time.
The Main Indices:
Look what I said last week!
I would be amazed if the IWM can keep this up for long.
And it didn’t did it!
As I’ve said many times, when the market is ready to decline, the IWM is typically the first and takes the biggest hit. In this case it’s taking the biggest hit – with more to come – but bizarrely wasn’t the first. This boded very badly for it, which is why I highlighted it last week.
Market Timers:
- Longer Term Market Timer (OVIsi):
Green. - Medium Term Swing Timer:
You just have to love this indicator. Bearish last week and just a tiny bit oversold this week, but that can continue. - Index OVIs:
Extraordinarily robust with only the SPY turning red, and even that only for a day. That suggests a temporary snapback or pause.
Fast Filters Stock Selection:
Quality has been even more patchy this week than the past 6 weeks or so. And now the markets are showing exactly why. So, this is a time to observe.
Remember, quality beats quantity. Even with our amazing new technology, a chart still needs to have the right qualities in order for you to consider trading it.
Pick your playbook and stick to the best quality setups that conform to it.
My playbook is OVI, near Key Levels, Shrinking Retracements, and a consolidation/sideways move. The other two Big Money Footprints are highly desirable but those four are essential to ME!
Go into the ‘Expert Watchlists’ area of the platform to view my Watchlists for (a) all the stocks I cover in today’s video, and (b) a smaller list that warrant a closer look.
** The list of stocks is in the Expert Watchlists area (just click on my image to see them), so you’ll have to log in to see it. Market Timing will also go inside a login soon. Remember to reference the video commentary so you know what my sentiment is on each stock listed. **
Software Upgrades:
Soon we’ll deploy the updated ‘How To’ video guides, and we’ve already deployed a handy ‘How To’ clickthrough guide to help you navigate the platform.
Next up is the journaling from the charts which will pave the way for:
- A link to a broker platform from the enhanced Journal app directly from the charts to make life much easier for you.
Imagine knowing if an options trade is in line with or violates your stated risk parameters!
We’ve already built the calculator engine, it just needs to be deployed. - More indicators to choose from inside our OVI charts …
Not so much for me personally, but I know many members do like to play!
Also, the full mobile phone (portrait) optimization is in the plan for the summer, and more dynamic notifications from inside the application will follow that. Lots to do!
Many more game-changing upgrades will be made in time for the London Stocks Summit on December 7th.
Events:
Our Stocks Summit in London on 7th December will be the most practical ever, with half of the event dedicated to practical exercises and with the most bonuses ever.
Like we just did in Orlando, each session will have a practical exercise for you to complete, so you can build your confidence in finding the exact type of setup you want to focus on. Easily by the event, all your TradeFinder activities will be directly from the charts, saving you huge amounts of time.
Watch today’s market review inside the members area here! To the left is the Watchlist area. To the right is the TV area.
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Remember, you can play the video at 1.25x or 1.5x speed if you want to save time! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.
