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Swingly Exposure Status: Risk On

OVERVIEW
All Time Highs Already

S&P 500 (yellow) vs US 10Y Treasury Yield (green)

We are experiencing a full-fledged raging bull market, ladies and gentlemen. In yesterday’s session, we witnessed the market reacting exceptionally well to the CPI data, which finally showed signs of easing back to 0.3%.

Josh Jamner of ClearBridge Investments suggested that the data is likely to redirect the discussion towards the timing of the Fed's cut in 2024, rather than whether it will occur.

Inflation and consumer spending are displaying signs of easing, and the current data does not suggest any imminent threat of a major economic downturn. This constitutes a significant victory for the bullish argument and is likely the fundamental driver behind the notable surge in buying activity and positive market sentiment in the US equities market.

The correction witnessed earlier in the year has concluded. The broader market has significantly outperformed the 10-year Treasury Bond, which was previously on an upward trajectory, leading to a substantial shift of cash out of equities and into the US 10-year Treasury instead.

The US10YT has now retraced to 1-month lows at the same time the SPY & QQQ have both hit all-time highs.

We also note the general high volume of individual stock set-ups which have finally broken out of their multi month consolidation patterns and are demonstrating significant buyer follow through driving their prices higher.

Some examples include:

SMCI: Super Micro Computer, Inc

SMCI Daily Chart

MSTR: MicroStrategy Incorporated

MSTR Daily Chart

NVDA: NVDIA Corporation

NVDA Daily Chart

The stocks mentioned above are all leaders in the current market industry theme. We observed a significant surge in buying volume for all three stocks during yesterday’s session. This surge instills significant confidence that we will likely witness other, more speculative and volatile, stocks following suit alongside these leaders.

If you missed an entry in these three stocks yesterday, reflect on why and how it happened. Remember, there will be additional opportunities presenting themselves, and it's crucial to capitalize on them.

You might consider looking for a pullback entry on SMCI, MSTR, & NVDA in the upcoming days or weeks, which could provide a low-risk position. However, it's worth noting that the optimal entry point was likely yesterday.

Nasdaq

QQQ VRVP Daily Chart

Large caps experienced a surge fuelled by strong buying pressure yesterday, following support found at the $446 demand zone, sparking aggressive accumulation in the QQQ.

This pattern closely aligns with the characteristics of a healthy uptrend following a volatility contraction pattern (VCP) breakout. The QQQ surged above all prior volume clusters leading up to $449, which was not surprising given the incredibly low density of supply, potentially reducing resistance.

We anticipate no risk of a "sell-off" and instead foresee the QQQ continuing to surge ahead for the foreseeable future, especially as more market participants emerge and contribute to driving the share price higher.

S&P Midcap 400

MDY VRVP Daily Chart

The midcaps are mirroring this trend, with volume steadily increasing over the last several trading sessions. Despite technically ending "red" on some days, the market has been steadily climbing higher over the past week.

The MDY has been surging through exponentially lower volume clusters between $546-$556, which is highly reassuring. The Point of Control (POC) is notably distant, all the way down at $530, indicating passive selling. This environment has enabled even low market participation to exert upward pressure on the share price of the MDY.

We anticipate continued price ascent and expect even more buyer participation to emerge in the coming days.

Russell 2000

IWM VRVP Daily Chart

The small caps are displaying aggressive upward movement, which is exceptionally thrilling. Typically, the most potent, explosive, and speculative stocks fall within this capitalisation range.

We noticed that the IWM encountered no difficulty in attracting heavy demand, even as the price initially retraced intraday to retest Tuesday’s highs at $208. We anticipate a highly volatile move to surpass $212 in the upcoming trading sessions.

We foresee no obstacles for the Russell 2000 to sustain this upward trajectory. In fact, we are eagerly exploring small caps to begin accumulating as we observe this exciting market movement.

DAILY FOCUS
Buy, Buy, & Keep Buying More.

We are now firmly in the beginning stages of a bull market. This is the opportune moment to aggressively accumulate the top-performing stocks that have showcased explosive VCP bases. Yesterday, we witnessed the two golden boys, SMCI & MSTR, breaking above declining resistance. If you missed this move, it's crucial to be extra vigilant in identifying which new stocks break higher in the coming sessions.

Do not succumb to fear or hesitation. Buy periods for swing traders occur very infrequently, often once every few months. It's imperative to be at your sharpest now. Stay focused, set aside any apprehensions, and trust in your conviction.

WATCHLIST
Our Focus List

ROOT: Root, Inc

ROOT Daily Chart

  • Root is consolidating within an exceptionally tight range following its explosive +260% surge from its earnings report in late February, which stunned the market.

  • This stock has the potential to run several hundred percent before even touching its daily 10 & 20-EMA.

  • We will be monitoring closely to see if ROOT can break above today. If it does, we will be ready to initiate long exposure.

CLSK: CleanSpark, Inc

CLSK Daily Chart

  • CleanSpark, a bitcoin mining stock, is finally showing signs of activity following its robust earnings report. With Bitcoin also surging higher yesterday, this significantly enhances the outlook for CLSK to move upwards.

  • If CLSK manages to surpass $17.35 today, we will initiate heavy long exposure. Please be aware that these stocks are highly volatile and can move swiftly, so swift action is essential in your entries.

MARA: Marathon Digital Holdings, Inc

MARA Daily Chart

  • MARA, like CLSK, is another Bitcoin mining stock. Given the upward movement of BTC and QQQ, there is a high likelihood of MARA experiencing a significant surge.

  • The price has contracted effectively, and the stock showed strength with a strong green day yesterday. If it had surpassed the declining resistance level at $20.35, it would have signaled a breakout.

This newsletter does not provide financial advice. It is intended solely for educational purposes and does not constitute investment advice or a recommendation to trade assets or make financial decisions. Please exercise caution and conduct your own research.

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