Riding Rally, Watching For Sudden Market Influences

2021-04-05

The rally to open the first full week of the month has traders stalking setups while keeping an eye out for sudden influences that might corral the bulls.

The Dow fueled the rally with a record high, closing at 33,527.19 points to gain 1.13% (adding 373.98 points on the day). The Nasdaq spiked as well to 13,705.59 points for a 1.67% increase while the S&P 500 jumped 1.44% to 4,077.91 points.

A strong jobs report, a tech sector boost, and yearnings of a robust economic recovery on the near horizon had the market churning.

Simpler’s traders were cautious about the influence of algorithms in this market. Today’s action could by some be described as “algos gone wild” with traders opting to avoid fighting the movement and execute available moves. A sudden shift in the algorithms could flip the rally.

Possibly unexpected influences to watch for this week include the Federal Open Market Committee meeting Wednesday and various conferences among key tech companies. These gatherings could shake up the chip sector.

Overall the week opened strong with the major indexes moving together early and holding through the session.

Market strength this week appears promising, so we’re searching for those high-probability, proven setups that could provide higher profit potential with less risk. Tech is showing some robust tickers.

The focus is on risk vs. reward while tempering the euphoria that comes with a rising market.

We Saw: Rally higher on economic news, forecasts — 

  • Tech sector setting up for higher run
  • Record highs leading to trader euphoria
  • Political tax talk heads toward feverish pitch

We’re Watching: Riding current momentum for quick gains —

  • Midweek meetings, conferences that could shift tide
  • Those same conversations could spike a higher rally
  • Setups in: LOW, AMZN, GOOGL, NDX, MSFT