Jack Carter Trading

Hey Traders,

I’ve been keeping a close eye on the market this week, and we’re at a critical point that every trader needs to pay attention to.

Today, I want to walk you through what I’m seeing in the broad market using the SPY, DIA, and QQQ charts and what these signals could mean for your trading decisions.

Let’s dive in.

SPY: The S&P 500 ETF

The SPY chart is showing some alarming signs.

Right now, it’s sitting below two out of three key trend points, which is not what you want to see in a healthy bull market.

In fact, if the short-term trend line (green) crosses below the intermediate-term trend line (blue), we could see the S&P fall sharply into a much lower range. Maybe all the way down to the red 200 day trend line.

That’s a level where traders need to be extra cautious.

DIA: The Dow Jones ETF

The Dow isn’t looking too good. In fact, it’s already experiencing the crossover effect I mentioned where the short term trendline is crossing below the medium term trend line:

All the gains of the post-election rally have been erased.

That’s right — we’re now trading below those levels, which isn’t just concerning — it’s a potential red flag for anyone holding Dow-heavy portfolios.

QQQ: The Tech Sector ETF

Now, let’s talk about QQQ, which tracks the tech-heavy Nasdaq. Surprisingly, it’s the strongest of the three indexes right now, but don’t let that fool you.

The QQQ’s strength comes with a big asterisk: many of the stocks in this sector don’t even have earnings.

Unprofitable companies trading at sky-high valuations make this index incredibly vulnerable in a selloff.

And here’s the kicker: even though tech is holding up better than the Dow and the S&P for now, if those two indexes fall even more, QQQ will likely follow — and it could fall harder than the rest.

Program selling — automated bots — across the board can quickly drag everything down.

What This All Means for Traders

Here’s my take: I’m no longer a bull.

The signs on these charts are clear — we’re entering a period of uncertainty and potential downside risk.

This doesn’t mean there aren’t opportunities. It just means we need to adjust our approach.

Whether it’s shifting to bearish trades, tightening up stop-losses, or looking for plays in safer sectors, now is the time to stay disciplined and focused.

You might even consider some insurance for your portfolios.

Final Thoughts

The market is at a turning point, and as traders, our job is to adapt.

Pay close attention to what happens over the next few sessions and consider tightening your stop losses or buying some protective puts as insurance.

Whether we see a bounce or further declines, keeping your eyes open is key.

Trade well,
Jack Carter

P.S. Move over A.I. — there’s a new game in town. These three tickers are being called “the new AI stocks” to watch.

This Week’s Stocks

Here’s this week’s trending stocks:

CRK

GKOS

And don’t forget about last week’s list, which you can find here.

What can you do with these stocks?

Well, there are a couple of things you could consider — after doing your own research, of course:

You could just buy the stock. This is probably the simplest thing you could do. Then just wait for it to go up and sell when you hit a profit target you’re comfortable with. This is only for stocks we’re long on. For stocks we’re short on, you can short them.

You could buy an option. You know I’m not a fan of speculative plays, but every once in a while it doesn’t hurt to throw a little cash at a speculative option. Of course, while options can move bigtime if the stock goes up… the downside of options is that you have a time limit on how quickly you need the stock to make that move. So think about your risk tolerance and consider buying calls or puts depending on the stock recommendations above.

You could do an income play. If you’ve been following me for any length of time, you know that I’m a big fan of income plays, because they increase your odds of winning. We do this by SELLING options instead of buying them. If you haven’t tried your hand at income trading yet, I urge you to try this exercise for yourself.

Without risking any money, it will really let you see the power of income trading and why it’s my favorite method.

Whether you end up doing naked puts, covered calls or some kind of spread (like this bull put spread example), income plays like these are really my preferred method to use when I’ve found a great trending stock like the ones on this week’s list.

Because even if the trend comes to an end, you don’t have to be exactly right. With a direction play like buying a call, you have to be exactly right. But an income play gives you a lot more “leeway”, where the stock can move against you and you still have room to breathe and win the trade.

That’s it for now.

Stay tuned, because I’ll be sending you a new list of TrendPoint Best Trending Stocks every week! (usually Mondays)

Trade well,

Jack Carter

Is The Market Turning? Here’s What The Charts Say.