🔥 Is This the Market Bottom or Just a Pause Before More Selling? 🔥
This week in the stock market was a wild ride, with major indices attempting to stabilize at critical support levels. After a series of deep sell-offs, Friday brought some relief with a decent bounce in the QQQs and SPY, but does it mean we are in the clear?
Let’s break down what happened, what’s next, and how to trade this volatile market.
🔍 Market Recap: Holding the 200-Day Moving Average – But for How Long?
The market got hit hard last week, with a nasty back-and-forth pattern where each bounce was met with another wave of selling. However, we finally reached a critical level:
✅ SPY bounced off the 200-day moving average
✅ QQQ held key support zones
✅ Bearish momentum slowed down, but it’s still a risk-off environment
But before you get too excited, we have to be realistic – this is NOT an all-clear signal yet.
📊 Key Market Levels:
- QQQ: 499 is a critical resistance zone – a break over here would confirm strength.
- SPY: Needs to reclaim 580+ to build momentum.
- Small Caps (IWM): Weakest of the bunch, struggling to find buyers.
- Bitcoin Stocks (MSTR, COIN, MARA): Still in a downtrend despite Bitcoin holding up.
The biggest issue right now? The longer we hang around these low levels, the harder it will be to rally. If we don’t start pushing higher soon, this market could be setting up for another leg lower.
📌 Top Trade Setups for This Week
Here’s the trading watchlist for the week ahead, including both bullish setups and potential short plays.
🔥 Long Setups (Bullish Plays)
💎 Lemonade (LMND) – Relative Strength Play
- Setting up a new base
📉 Short Setups (Bearish Plays)
📉 Tesla (TSLA) – Bear Flag Setup
could not sustain any bounces last week
📉 Nvidia (NVDA) – Struggling to Rebound
- Major resistance at every level
📉 Bitcoin Stocks (MSTR, COIN) Risk-Off Mode
- Failed to hold gains last week
- Could see another breakdown if Bitcoin weakens
⚠️ Key Takeaways – What’s Next?
✅ The 200-Day Moving Average Held – But Can It Last?
This is a crucial level for bulls to defend. If we break under again, we could see a fast flush lower.
✅ Watch for Weak Opens & Red-to-Green Moves
If we open weak but reclaim today’s high, that’s a bullish signal. However, if we gap up too much, be careful of potential profit-taking & reversals.
📣 Final Thoughts – How to Trade This Market
This is a trader’s market, not an investor’s market. Stay nimble and stick with high-probability setups.
🚀 How We’re Trading It:
✔️ Looking for weak open & red-to-green moves
✔️ Playing strong stocks leading the rally
✔️ Avoiding low-quality, speculative plays
✔️ Using options on indices for bigger moves
Don’t get too aggressive until we see confirmation. The market is still in a fragile state, so risk management is key.
🔥 Want to Learn How to Trade Like This? 🔥
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