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Monday, April 24, 2023

Weekly Wrap-up, and a Look Ahead as Focus Turns to Tech Earnings

In this week's newsetter I reiterated that the market holding up as it has...  had everything to do with Options Expiration; so now that OPEX is past, will the market finally correct? Probably not. 

Sideways market action points to consolidation, and usually bullish consolidation. 

If you know even basic Elliott Wave Theory, then you know that sideways action has all the underpinnings of a classic wave 4 pattern, and in this instance, a bullish wave 4. 

Even traders who don't know Elliott Wave Theory call this kind of sideways action, "the pause that refreshes". 

Tech - The Most Heavily Manipulated Market Of All 

Of course the powers that be are planning to squeeze the short sellers out of the tech sector again, but I think not until they're done setting the bear trap. 

Not knowing how earnings are about to play out, puts us at a bit of a disadvantage. 

I couldn't even tell you who is set to report... because my favorite website for that kind of information, seems to be down - possibly due to the latest solar storm. 

NVIDIA isn't set to report for another month May 24th. 

You can see this sideways consolidation perfectly on the $NVDA chart below. 

$NVDA - 15 min. view -  Looks like a sideways (contracting) triangle in minor a wave 4.  


Because this just happens to be one of the top 10 holding in the $QQQs, and this market is all about juicing the QQQs. I'm sure you've seen the endless commercials.... 

Related: April 4th

Here's yet another major component of the QQQ's being pumped on Friday 

 $AMZN  Amazon

 $QQQ Invesco QQQ - continues to drive this market. Next target looks like 333 (335) a slightly higher recent high

Funny how well the targets seem to line up on the above chart, when they don't line up on the NASDAQ chart. Just points to how narrowly traded this market is.

I'd guess that target coincides with 4200 on the $SPX, since the powers that be remain hyper focused on round number targets?   

Speaking of the $SPX 

I was looking at the $SPX futures on Friday, and found this down-turned triangle pattern, so I think there's a good chance we see a downside surprise first thing Monday morning.  

That chart explains a lot! Explains why US traders can't find a pattern on the $SPX chart - because foreigners are driving the US futures market, as they continue to drive Europe higher, as they claim everything is hunky dory. 

Of course US markets look weak, and that makes investors nervous/ bearish. 

To add some weight to that theory, most the retail traders on twitter who thought the market should sell off several weeks ago, are still betting on a correction.

I want to bet directly against that crowd, or at least not bet with them. 

With any luck we can continue to set the bear trap this week, and then squeeze the retail short sellers into the beginning of May, on the heals of another FOMC announcement.    

Looking ahead to the FOMC meeting

Typically you get a relief rally on a Fed meeting, regardless of the decision, so watch for that. 

I would expect to get a pullback ahead of the Fed meeting, followed by a bigger short squeeze.  

Maybe the upside target overshoots. No doubt the bulls want to force a short squeeze, before they take profits, and take off for the summer. 

To be honest it's still a little difficult to predict a big breakout here, but I'll try to update future targets as they unfold. 

Good Luck, AA 

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