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One Green Day Changes Nothing

Exposure Status: Moderate Risk

OVERVIEW
Not Convinced By Yesterday’s Push

Happy Tuesday, team!

Yesterday, we saw the broad market attempt a push towards the close, which sparked some excitement, especially on Twitter, where people started buzzing about these gains. It looks like Wall Street is set for more gains today, with big tech companies rallying and pushing the S&P 500 to another record high in pre-market—driven mostly by Apple and Nvidia.

At Swingly, we remain more bearish than most. Yesterday's green rally was nice to see, but it wasn’t enough to get us too excited. The vast majority of stocks are still trending down, with most breakouts failing, except for SMCI, which stands out as an outlier, much like its bigger AI-related counterparts.

We did notice CLSK and a few other crypto-related names like WULF and IREN holding strong, but this isn’t enough to claim that the rally is beginning again or that it's time to go aggressive on long exposure.

This narrow breadth doesn’t mean you should start shorting or get scared; it just means you shouldn't rush to jump in. Be more selective than usual, focusing on the few companies moving higher. However, it's too late now to get exposure in the main movers like SMCI, NVDA, AAPL, and MSFT.

We need more confirmation to get aggressive.

Nasdaq

QQQ VRVP Daily Chart

The Nasdaq is pretty much going parabolic at this point. The tech-heavy index hasn't stopped pushing higher, even with the vast majority of stocks in the QQQ lagging behind.

Yesterday’s session saw very high green volume coming in and driving the QQQ, surprise surprise, to all-time highs above $485. We are confident we will see $490-$500 very soon, after which there will likely be a mini pullback as the psychological level of $500 is where many traders are likely to take profits.

S&P Midcap 400

MDY VRVP Daily Chart

The midcaps are actually starting to show some promise as they find demand at $528, forming a solid green candle that is retesting its declining 10, 20, and 50-EMAs, along with the MDY’s point of control (POC), all at the same time.

This level—$536—is incredibly important to break through if the midcaps are going to see any real resurgence, given how many critical elements converge at this zone.

We suspect we are going to see a test of $536 today. Whether or not we break through is really up in the air.

Russell 2000

IWM VRVP Daily Chart

The small caps are in the same spot as the MDY finding support at a critical demand zone (see VRVP above) but still very much below all of it’s key daily EMAs and POC level.

It’s going to take a lot of work to see the small caps making any sort of progress this summer and although yesterday was a step in the right direction- theres a lot of work to be done.

DAILY FOCUS
Be More Selective & Patient Than Ever

VanEck Semiconductor ETF: SMH

When we talk about the breadth being narrow, we really mean it. The only sector outperforming the market is semiconductor-related (see SMH chart above); all other sectors and industry groups are lagging and underperforming.

The divergence between the QQQ, MDY, and IWM indicates issues in the underlying market, but that doesn’t mean you can’t trade and make money. Our trading desk is at peak equity as we have simply followed where the big money is flowing—semiconductor-related megacaps.

Your job as a trader is to be aware that the majority of stocks aren’t doing well and ride the momentum in the stocks that are performing—simple.

In today’s session, we will continue our strategy from yesterday, avoiding exposure to anything not related to semiconductors or AI, while looking to add to our open long positions in SMCI, NVDA, or COIN if we see the opportunity.

WATCHLIST
The Very Few Set-ups

MARA: Marathon Digital Holdings, Inc

MARA Daily Chart

  • Bitcoin miner MARA continues to form a monstrous base, getting progressively tighter as it compresses along its key daily EMAs.

  • We've seen WULF and IREN make +100% moves within a few weeks after breaking out of their multi-month bases, and MARA looks very similar to them.

  • Although BTC has weakened in the last week, MARA should still be on your radar.

DELL: Dell Technologies Inc

DELL Daily Chart

  • Computer company Dell broke out of a narrow range in yesterday’s session with strong volume, and today it appears poised to fill the gap directly above, potentially leading to a straightforward +15% gain.

  • Being part of the strongest sector and industry group, we are closely monitoring Dell for continuation today.

  • Our strategy involves looking for an opportunity for a quick, oversized swing trade up to the gap fill level around $165.

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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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