TLDR: Really constructive week for the Qs after the Fed undercut. Friday was a setup day at resistance, not a breakout, so we show up ready and we do not get heavy until that line gives. Eleven deep dives plus honorable mentions.
Welcome back to the Weekly Trading Plan. Here’s what we’re covering:
Market Pulse. Fourth trip through the 50-day, setup day at the line.
Crypto.
Space and software.
Healthcare and biotech.
AI and memory.
Honorable Mentions. A longer list of names worth watching.
Closing Thought. Show up with the lunch pail.
How we trade these names. This is not financial advice. Be sure to do your own research. Managing risk should always be your priority, and that means never blindly buying into names you see on a newsletter. Build your system and follow your rules.
Market Pulse
Really constructive week for the market, especially the Nasdaq 100 and the QQQ.
Fed day traded under the 50-day and undercut the lows going back to late August. Then it closed higher. Next day gapped up. Friday retested the short-term moving average and the market closed strong.
That Friday bar is a setup day. An up day where the market is testing resistance and is now set up for a breakout. We have not confirmed it. We have not broken out of the QQQ. The second half of the week was the part that matters.
We have been here before. This is the fourth time we have come through the 50-day with hopes of actually trending higher. Every time it has not worked. The market wears people out.
As I have said in prior plans, we show up with the lunch pail and the watchlist. Ready to add exposure when the market actually follows through. That tends to happen when everyone has given up. The market is built to disappoint the masses. Here we are with the lunch pail again…
I would not go on margin. I would not get super heavy until we break through this resistance, the black line on the QQQ and the same line on the Nasdaq. Very clear line in the sand. If we get through it, there is a real chance this trends higher into the fourth quarter.
What made the week better than the last few tries: the stocks followed. That is more important than the index sitting under a line.
The negatives are still there. Very few names are clean. A lot of wide and loose setups, not a lot of tight coiled ones. IWM is one of the better tells I use and it is not doing well. Breadth has not joined. We would like to see the Russell hold its recent lows and start to build a base. The S&P looks better. The equal-weighted S&P does not. Strength is concentrated in the mag 7 and in a short list of AI names that are showing real relative strength.
I am fully invested at this point. We take it day by day. If the market gives an expectation breaker to the downside, we cut the losses and pack it up.
