Every week I post the combination of technical analysis and modeled support and resistance levels for the week ahead, this approach allows us to find the best opportunities in the market by anticipating direction and then destination.
Technical indicators provide direction, while the modeled support and resistance levels provide destination. I use a third tool, the Momentum Map, which helps us understand which stage of the cycle each ticker is in. Those three elements form the foundation of the Setups Blueprint, where all the stocks, indices, and ETFs from our watchlist are mapped, each with their market condition (bullish or bearish), price targets, invalidation levels, and risk-to-reward ratio. In that blueprint, I highlight my preferred setups based on their probabilities of success.
Last week was choppy for the market as anticipated. I highlighted declines in the S&P 500 and the Dow Jones as high-probability setups, using SPY, SPX, and DIA as the instruments to set the targets. DIA reached the bearish target of 522 for a -2.2% move 🎯, and SPY hit 761.8 for a -1.1% move 🎯. They actually extended their losses, but I mark the targets officially reached.
Being bearish on the indices doesn’t mean that the entire market will fall; successful traders know that very well. While we were bearish on the indices, individual setups for AMD, AVGO, META, SPCX, and VXX were printing reliable bullish signals. They reached the targets I anticipated for the week in this publication as follows: AMD easily made it to the $504 target for a +5.5% move 🎯; AVGO to $373 for a +4.2% move 🎯; META to $660 for a +7.1% move 🎯; SPCX to $154.1 for a +4.2% move 🎯; and VXX to $18.5 for a +4.4% move 🎯.
With that said, my Setups Blueprint is neutral, featuring both bullish and bearish setups. There are also several other advantages to this specific approach:
All the tickers are analyzed every week. So, whether you trade the SPX and Futures only, DIA, and QQQ only, NVDA and TSLA only, or AMD and PLTR, they are permanently analyzed so you can focus on the ones of your preference from this watchlist:
Indices & Futures: SPX, NDX, DJI, IWM, ES=F, NQ=F
ETFs: SPY, QQQ, SMH, TLT, GLD, SLV, DIA, VXX
Major Stocks: AAPL, MSFT, GOOG, AMZN, NVDA, META, TSLA, SPCX, LLY, WMT, AVGO, COST, JPM, XOM, PLTR, NFLX, V, AMD
Crypto & Related: Bitcoin, Ethereum, ETHA, IBIT
The next advantage of this approach is capital protection and risk-to-reward analysis. Every setup has an invalidation level; if that level is lost, momentum could be flipping from bullish to bearish, or vice-versa. This week, the capital protection references for XOM, GLD, and WMT kept risk limited to -0.7% average for three tickers while gains averaged +4.1% for seven tickers.
Last but not least, I post daily market updates. This week was dedicated to providing guidance on how to use this information, and these publications are a must-read to get the key learnings and guidelines:
Unlock this objective approach by upgrading to the paid plan. Subscribers also get access to educational content and Market Intelligence analyses, including three core publications every week (Friday, Saturday, and Wednesday) covering indices, megacaps, ETFs, and daily updates tracking the watchlist with daily levels for the SPX and ES=F. Everything is available at smartreversals.com. Zero gut feeling. Everything is specific.
Paid subscribers can download my two ebooks on technical analysis from the Market Intelligence Collection, and can submit their individual stocks in the chat every weekend for a customized analysis of weekly support and resistance levels.
Next week, I’ll navigate the new setups with you using my daily notes, which also include key daily levels for the SPX and ES=F. This is likely to be a volatile week. The Fed will decide whether there will be a rate hike or not, and most importantly, the market will pay serious attention to the words of the Fed Chair.
This is very similar to an earnings call. The Earnings Per Share and revenue beat are important, but the forward guidance provided by the CEO is what truly drives the stock, which is why a company may sell off even after beating earnings if guidance falls short. The same dynamic applies this Wednesday. A hawkish speech will be more bearish than an eventual rate hike itself, which, by the way, currently carries official rate hike odds of 86%.
As of today, the overall market has been weak, though semiconductors, select technology names, and energy managed to stay green during the last five trading days.
On the other hand, a significant number of Hindenburg Omen bearish signals have been triggered over the past few weeks (not one, not two, but nine) adding significant pressure to current price action. We will study what this signal is and which price action elements synchronize with it.
Today’s Agenda
Market Context: Charts+levels for SPX, Indices, ETFs, VIX, Breadth, and Bitcoin.
Deep Dive: Individual analysis with charts and targets for Mag Seven and setups.
Momentum Map: Analyzing the stage of every security in a single view.
Setups Blueprint: Entry levels for short and long setups with price targets and invalidation levels for all the securities in the watchlist prioritizing stronger setups.
Let’s begin.