Market Wants To Move Higher – Watch This Level On the QQQ – Use Stops
POSTED BY PETE STOLCERS ON MAY 9
Yesterday the market shouldered a negative news event and stocks are up before the open this morning. The US pulled out of the Iran nuclear agreement and this could have sparked selling. The bullish reaction tells me that buyers are getting more aggressive.
One by one the political uncertainties are being resolved. Trump will meet with North Korea to discuss denuclearization. Nothing is certain, but we are talking. The biggest dark cloud is a potential trade war with China/Europe. Those negotiations are ongoing and the timelines for new tariffs have been postponed. These winds can change quickly so we need to use caution.
The Fed is dovish and moderate inflation is giving them breathing room. Economic conditions are strong and the market can shoulder two more rate hikes this year.
Earnings season has been excellent with companies growing profits at an average of 25% and revenues and an average of 10%. These are the best results we’ve seen in many years and guidance has been strong.
. The market wants to head higher, but a trade war would yank the rug right out from under it.
Swing traders should be long QQQ at $163.50. We bought the breakout last week. Use $163.50 as your stop on an intraday basis. Tech stocks have been particularly strong and a cup and handle pattern has formed on the QQQ. If it can close above $166.50 the table will be set for another leg higher.
Day traders should use the first hour range as a guide. Wait for the breakout and go with the flow. Early gaps higher have had a tendency to reverse so wait for the first 30-60 minutes to pass.
As long as the trade negotiation rhetoric stays positive the market will grind higher
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