Tricky tape as the first part of the week was met with continued selling with Friday finally showing some buying with a reversal at the first major support level in the QQQ and SPY. Objectively tech and NVDA have been a drag, and the S&P non tech names look so much healthier than anything tech related.
I personally don't think Friday's low was a bottom, but I will let the action dictate my process. I have mapped out some of the strongest names I'm watching if the market does want to bottom.
I will continue to hold significant amounts of cash and look to do way less while the market is in this phase of extreme volatility. Tight swing trading stops have gotten chopped to death in this environment, so we want to wait until we start seeing more positive traction out of the market before we look to go full blown portfolio approach.
What has been working well has been coming into each day with cash, picking spots very carefully and taking profits into strength rather than wait to be stopped out because you give so much of your profit back. If you don't want to day trade, there is no problem with that. Simply sit back and wait for the better times ahead. We know we can collectively put up huge numbers quickly when the market is rolling. We want to avoid thinking we're still in that great swing trading environment and not give back our gains from the 'easier' times.
Trump notably announced some sort of strategic crypto reserve over the weekend. Bitcoin was down below $80,000 Friday night and with the announcement is currently about $93,000 on the announcement. I have used bitcoin as a sort of risk on/risk off indicator for Nasdaq the past few years. While this announcement solely feeds crypto, I wonder if the excitement spills over to tech to start the week? Not sure, but will monitor the relationship closely.
We have another week jam packed with economic data and Fed speakers. We have construction spending and ISM services Monday at 10am. There's also employment numbers Wednesday along with the Fed's beige book at 2. We have jobless claims and productivity numbers Thursday and finally another huge jobs report with employment numbers Friday morning. The market is hanging onto data much more in this volatile environment than in month's past, so it's important to keep an eye on what data is dropping when.
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