Has the Storm Passed?
Key Levels to Watch for Today’s Bounce: When Cracks Become Craters
It’s only day two of this volatile week, but it feels like it’s been much more. The “cracks” we discussed over the weekend, before all this craziness started, are playing out as expected. The VIX was clearly brewing a significant spike, and market participation was already waving red flags of overcrowded bullishness for the SPX and DJI, all while tech showed underlying weakness.
Some traders assume new highs are always bullish, even for breadth indicators, but that’s simply not the case. We warned about this last Saturday with specific charts in the Weekly Compass.
The Power of Preparation
Out of the setups we analyzed last weekend, 14 were bearish. As I mentioned then, a breach of the Central Weekly Level for the SPX was likely, in that case triggering a broad move lower with the biggest index. Those 14 bearish setups were a warning that individual names from different industries were signaling turbulence ahead.
Regarding our preferred bearish setups, NDX and AAPL reached their extended bearish targets ($24,949.2 / -2.3% and $246.1 / -3.7% respectively), while GOOG exceeded its bearish target of $323.5 (-2.1%) before bouncing. Although PLTR and TSLA were not on my top list, they were presented with their bearish setups and moved as expected, hitting their targets of $162.0 (-5.2%) and $421.9 (-3.6%) before attempting a bounce.
Even in this bloodbath, strength stands out. COST has been a favorite of mine for weeks; it’s up another 2% this week despite the market turbulence. That is the power of a high-conviction setup.
We maintain a permanent, disciplined watch over the specific securities with high volume and from different sectors. This allows you to spot capital rotation early moving your money from a stalling sector into the next leader and refine your entry timing with precision while others are still scanning for ideas. Our Core Watchlist:
Indices & Futures: SPX, NDX, DJI, IWM, ES=F, NQ=F
ETFs: SPY, QQQ, SMH, TLT, GLD, SLV, DIA, SH, PSQ
Major Stocks: AAPL, MSFT, GOOG, AMZN, NVDA, META, TSLA, BRK.B, LLY, WMT, AVGO, COST, JPM, PLTR, NFLX
Crypto & Related: Bitcoin, ETH, IBIT, MSTR
Leveraged ETFs: TQQQ, SQQQ, UDOW, SDOW, UPRO, SPXS, URTY, SRTY
While I highlight the highest-probability setups from this list every weekend, all of them are covered in our Momentum Map and Weekly Setups. This publication serves as a strategic guide based on professional analysis, but it also gives you the space to think critically and make informed decisions when choosing your own setups.
Whether you want to improve your trading performance, master technical analysis, understand fundamentals, or get custom support and resistance levels for your preferred securities, this publication is for you. Upgrade now!
Today’s Agenda:
Setup Blueprint & Risk Management: A fresh look at how to manage high-probability setups. I’ll show you why I post coordinates for our entire watchlist—giving you clear entries, targets, and invalidation levels.
Setups Q&A: How to manage them in premarket? What happens if the price is below the CWL for bullish setups and vice-versa? How to scale the S/R levels?
High-Alert Charts: Technical conditions on several names suggest we need to be on high watch for reversals.
Netflix (NFLX) Earnings & Technicals: This stock has been hammered for months. As I noted last weekend, I doubted a further 10% drop was likely. Today, we saw an “Extreme Reversal Setup” that is a must-study.
Deep Dive Visuals: Updated charts for SPX, NDX, VIX, Bitcoin, AAPL, TSLA, NFLX, COST, and AVGO.
My eBooks on Essential and Advanced Technical Indicators are linked below after the SPX analysis. Subscribe now and level up your trading!
Let’s begin
SPX - This Timeframe is Useful in Choppy Markets: