Open Now, Here’s the new look. Also, Watch The NASDAQ Closely

Welcome back! We have a lot of things to cover. Let’s get right in. First thing’s first, as we take a look at the Nasdaq. The Nasdaq is something we want to watch very carefully, and here’s why. We have this big distribution bar from Thursday of last week but Friday we had a big accumulation bar. We had distribution and accumulation back to back. Today, basically we now have distribution and accumulation on the same bar as of about an hour before the market close. Clearly, this is coiling up and whipping both ways. I’ve used the other markets as a key guide for right now. I talked to you a lot about that. The Dow and the Russell in particular using that as a guide. Even the Russell this morning went ahead and dipped down so the key level to watch was that 1690 level. It held it like a charm, turned right around and took back off. That led to the market take off. Right now, with this distribution immediately above us and the support down below us, a market that has additional resistance (like on the S&P and Russell) we have a negative divergence that’s distributing. We want to see what way that’s going to break. I’m really watching this distribution bar from last Thursday, the accumulation bar from Friday from key breakout/breakdown points. The market was caught within those levels and created an accumulation/distribution on the exact same day. They do happen every once in a while but they’re more rare. Usually that leads to big moves shortly thereafter. It can be indicative of some nice volatility, which can lead to some nice trading. What a great time to have the market moves. The Nasdaq is very important directionally for this market for the rest of the week.

Let’s catch up on some other markets. As it relates to bonds, we had this big positive divergence that had taken place. We had really nice sell signals, the market sold off with my indicators, came down and made an even lower low. We made a positive divergence with my indicators. That led to the market holding in there. That’s an important strategy. We had this resistance and I’m watching in this area. Basically the 147 level. If we can break above the 147 level and make that support, we can see much higher prices. In the meantime, we’re due for some natural price creep to the upside. We’re challenging it in the 147 area because of the positive divergence in the backdrop.

Let’s take a look at gold. Gold should be no surprise to anybody who’s watching here. The problem is I’ve noticed a huge uptick of people asking about gold coming into this morning. That itself is very concerning. The market had sell signals on the way down. This thing was really selling down and numerous sell signals so the question is, where was everybody when all those sell signals were firing off. You can rarely find an indicator of mine that was anything but selling off. Now, we have a situation where we’re making lower lows in price so we have this positive divergence. If you take a look at it from a weekly basis, you have this big woosh down like a blow off bar. Now people want to get into gold. Whenever I see that I always challenge that kind of mentality to be the next person in. It’s much better to be one of the first people in with great sell indications much earlier. At this point, I don’t have a fresh short-side trade at this moment on gold given what we just talked about.

A quick update on crude oil, we have rising support and falling resistance. At this point, we have the 6450 area that’s key support. I’m still not interested in long-side trades until this gets up around the 7050+ area. If for anything other than intraday trades. From a swing trade perspective, it’s not a good place to be at this time.

As we move to Goldman Sachs, this market is holding up pretty well. It held the market up very well. We have this sell-off in the stock index futures that turned around and got reversed. I told you to watch these key levels now in Goldman Sachs and none of that has changed. We still have 240 being a major level up above. Gravity is sucking us toward that allowing us to drift up. Watch out for those negative divergences I pointed out in the stock indices and key distribution areas. How is Goldman Sachs going to fare with that and it’s own key resistance it has to deal with. It will give us a good indication on where to look at the market as a whole.

I told you last week that NFLX was going to be at a key support level on a weekly chart and the daily chart. That being said, I have no interest in any dead cat bounce or catching a falling knife-type plays. On a swing trading basis, you have to get above the 350 area. On an intraday basis, there is going to be some short-term trading opportunities especially with this being a $1 stock, there’s a way to pull a couple bucks out of this thing, it could be to your advantage. On a swing basis, we have rising supports underneath and falling resistance on top of you. We’re holding on for dear life, I told you last week that’s the area we have to hold or it could get much uglier for NFLX. Intraday trading and sleep like a baby at night until we’re back above 350 then we’ll reevaluate.

I talked to you guys about TSLA in previous videos. This whole thing that happened with Elon Musk is bizarre at best. The SEC and other agencies may have concerns at worst. What’s happening here is we’re holding on for dear life at the $300 area and it’s been important to us in the past as well. As far as I’m concerned, TSLA is only a day trade. It has had a proven history of being able to channel around this $300 mark and gave some good plays. You have a guy who says he’s burnt out but he can’t rest. There’s a lot of people wondering what the heck. As far as I’m concerned it’s a day trade only an intraday basis to see what else it can handle. 300 has been hit so many times. It’s had a proven history of being able to bounce but are there going to be some fundamental shifts? Will there be any kind of penalties for the comments that were made? We already know they burn through cash like crazy. Is this going to be an overall loss in this market? I’m not willing to hold this overnight. I don’t want to wake up and see a Twitter situation. TSLA could have some huge drops. I would not be interested in a $300 catch a falling knife for a retracement situation. If it turns right around and goes up, I’ll focus on catching some of that on an intraday basis and sleep like a baby not worrying about what shoe will drop.

We talked about the concept of making lower lows and seeing reversals. We talked about that with the bonds for instance. If we look at the Nasdaq from this morning, that was a great way to help me identify where things were coming to an end. This morning, we had these beautiful sell signals and the market sold. We made a lower low in indicators and lower low in price. Then we got to the point around 9:15 a.m. we made a lower low in price and a higher low in the indicators. We went back to buy signals going into the afternoon. Keep in mind when the indicators and the price are no longer pushing, that’s an excellent place to say things are getting real hot right now and step aside until the signals start to present themselves in the opposite direction. The positive divergence in this case was a key indicator on where to back off on shorts from this morning. We talked about it in relation to the bonds a little bit ago. We cover both day and swing trading here. The bonds had the weekly version of the same thing. We need to know where to back off. We could have the indicators in price making lower lows together. Usually we’re in for one more push. If you get that push to make lower lows that traps in a lot of retail traders and if it’s done with a positive divergence, watch out. That’s normally a retail trader trap.

Have a great night! I’ll look forward to seeing you in the Live Trading Room and the upcoming videos.

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