Looking For Bullish Indices To Hold Structure

2022-01-05

The year 2022 strutted onto the scene with purpose, trending bullish.

Yet, the sector that is filled with darling stocks – Nasdaq – started sputtering out of the gate. Lack of conviction in this new year market has traders nervous.

Where do traders find setups in this uncertain environment?

Simpler’s traders look for setups in the time-tested squeeze. Trading squeezes is a favorite trading setup among our traders. Finding a solid entry that fires to the upside is where our traders focus their energy.

By watching for the signals on the charts that reveal information needed to implement proven strategies, Simpler’s traders can take advantage of upside moves in this market.

It’s crucial to look for a time frame that suits a trader's particular style, i.e. swing traders look at the charts differently than a day trader. Traders should watch for the numbers to come together in the ideal setup in a way that works for them.

Traders will find that the still bullish-leaning structure in the S&P 500 and the Nasdaq could yield some strong setups. Semiconductors are still holding structure, even in the midst of recent volatility. Semiconductors power home devices, vehicles, and most everything electronic in an increasingly digital world.

Of course, should decreased manufacturing capacity create an increased shortage of chips, companies and investors in technology stocks could feel the impact.

The key to trading strong stocks, such as tech darlings, is to find the squeeze. Simpler’s traders look for key support, and then chop, for a setup. The targets are stocks that are trending nicely, forming squeezes that signal potential upside moves.

Overall, despite some setbacks in darling stocks, the indexes look bullish. Simpler’s traders are looking for higher highs while they look at bullish plays for a bounce, should those setups appear.

Wherever traders find themselves, it’s crucial not to fall victim to “FOMO” – Fear Of Missing Out. This can cause traders to force their hands just to make a move that results in a negative play. Traders are encouraged to find solid setups and take profits where they can.

The market will do what it will. Be purposeful in trade setups, and manage risk accordingly.