The Nasdaq closed up 2.89% on high volume, the VIX is back under 15, and the S&P is 30 points from a new all-time high. AMD already broke out on climbing volume, and I think NVDA is the next one to go. I walk through the $230 breakout level, my $250 and $260 targets, and the three ways I am looking to trade it.
The Fed raised rates this week and the index barely moved, but underneath the surface the RSP and the IWM have been drilled for weeks. My breadth readings went from 70% down to 20%, and that kind of stretch usually puts us in bounce territory. I also go through crypto, which was the strongest thing on my screen, and the Coinbase trade I put on today.
What I want you to take from tonight is the gap pattern: when the S&P gaps 1% or more, that gap usually does not fill, and the drift lower traps traders who position for it. I show you how to trade it in both directions on a five minute chart.
While the broad markets were weak today, there were a few stocks that stood out. We’ll see if they have more to offer as we round out the week.
