Hey traders,
I wanted to share a quick market update because there’s a lot of confusion out there about the current state of the market and some individual stocks.
So let me show you how I navigate this terrain.
First and foremost, I rely on my proprietary TrendPoint software to guide my decisions. Can do a similar thing with most any charting tool.
I set my chart timeframe for six months and set up 3 trend points or trend lines:
- short-term trend (green) – 20 day simple moving average
- mid-term trend (blue) – 50 day simple moving average
- long-term trend (red) – 200 day simple moving average
After I do that, the first thing I always check is stock ticker SPY.
As you can see, SPY is currently bullish.
This means it’s above all three trend points — short-term, mid-term, and long-term. When a stock or index is above all three trend points, it’s a strong indicator that it’s bullish.
Next, I check DIA. I always trade in the same direction as the broad market because having a market-driven strategy is crucial.
DIA is also bullish, although not as bullish as SPY.
Then, I move on to QQQ, which is tech-heavy and where a lot of the action is.
QQQ is bullish too, which is a very strong sign.
With three major indexes all showing bullish trends, it’s a green light for looking at individual stocks in good trends.
I look for stocks that have hit a new 52-week high and trade at least 500,000 shares of average daily volume.
These stocks also need to trade on a major exchange and have options available.
I love using color-coded daily bars to get a quick snapshot of stock movements.
On my TrendPoint software, a blue bar day means a higher daily high and a higher daily low, which is a strong indicator.
A yellow bar day means a higher daily high or a higher daily low, but not both.
A white bar day means neither, which is a sign of consolidation or potential weakness.
It’s just another quick, visual way for me to gauge how that stock or index is moving.
Let’s take a look at some popular stocks.
Lilly (LLY) is looking great. Very bullish, as it’s far above the short-term trend line.
Microsoft (MSFT) is also performing really well.
And, of course, everyone’s favorite — Nvidia (NVDA) — is still bullish, having found great support at the short-term trend point.
This is one of the many things I love about TrendPoint software. It helps identify support levels, making it easier to predict stock movements.
When a stock moves away from the short-term trend point, it tends to get more volatile.
A lot of times, it’ll drop and look for support and it’s amazing how often the short-term trend point acts as that support level.
Bouncing right off that short-term trend point gives me a clear view of what’s happening in the market.
Using this tool, I can find the hottest stocks every single day the market’s open. It sets me up for success and gives me confidence in my trades.
I just held a FREE class today, where I went more in depth about everything I talked about here… Plus, I also shared how I know when to take profits, which stocks to avoid completely and gave away my list oft the TOP STOCKS for this summer! If you missed it, click here to catch the on-demand replay now!
Trade well,
Jack Carter
