Yesterday was relatively uneventful, which can be seen as a good thing. After a strong rally, a pullback is expected, and it provides an opportunity to reassess the market and identify leaders and laggards.
With that being said, let’s take a look at what’s happening in the broader markets!
📈📉 S&P 500 Futures Update
We’re taking a step back today to get a fuller understanding of the long-term conditions. That green zone you see is the same one we’ve been discussing for the past few days. When I zoom out, I can see that this area has been of high interest since September. It’s clear that if we want to see a continued upward trend, this area is the first that needs to flip from resistance to support. Until that happens, we will either continue to chop around or drop back down.
Now let’s zoom in and analyze what’s happening in the short term. Here is the daily chart, where we can see that on Monday, we had a turn from the zone followed by a choppy day with little movement. We keep testing this zone but have not been able to break through it. Ideally, we should see some consolidation around this area before continuing to push higher.
AMD has had a remarkable run this year and has returned to its August highs. However, it hit a resistance zone near $100 and pulled back. We are currently in a consolidation phase, which is beneficial as it provides us with an opportunity to analyze the situation for our next trade. It’s worth noting that just because we are facing a resistance zone does not necessarily mean that prices will plummet. Ideally, buyers will step up, continue buying, and eventually turn this zone into a level of support, holding prices up and preventing them from falling below it.
Today, my watchlist consists of AMD, NFLX, and TSLA again. I am still testing my strategy and prefer to focus on a few names rather than overwhelming myself with too many choices. If a setup presents itself, I’ll take it; if not, that’s okay too. It’s important to stay disciplined and patient in trading.
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