Balancing Markets Tighten

Hey everyone, I'm charting man Dane with the chart guys checking in on markets. And despite all of the back and forth with probabilities of a rate hike and jobs, data, and volatility, we're still watching for the technical most likely scenarios, which are weekly higher lows. Some bulls are further along, shaping those up than others. We had some nice memory volatility to end the week yesterday on Friday, and we knew that volatility was coming due to the constricting ranges. We're going to talk about that and all of our major sectors right now. All right. So, we're going to start on weekly time frames for everything and we'll zoom in a bit to the daily from there. And again, just the fundamental backdrop. Uh we've gotten the majority of the data that's going to significantly influence the probabilities of a rate hike or rate h rate cut. Uh rate cuts not on the table in September. And that has been fluctuating between 66% probability, we get a hike down to 50%, back up to 60%. And so the market has no idea as we head towards that point in time. So you know, a lot of people focused on the jobs numbers Friday. I don't care at all about the jobs numbers. I care about the price on the chart. I care about is support holding. Are we forming a higher low? that matters so much more to me. Uh and that's just what's allowed for me to succeed as a trader completely eliminating that because otherwise I then get in a game where you know is my interpretation of that number going to lead to me outsmarting the market. My answer is no. Uh, and it's the same thing with, you know, trying to get that data as fast as possible. By the time you get, but by the time you read what that number is on the jobs report, on the FOMC, on anything, you just have to realize that hundreds of millions of dollars have already read, interpreted, and reacted by the time you finish that first sentence. So, there's no edge there in my opinion. Okay. So, now we're looking for the most likely scenarios. the technical scenarios and hopefully you've been following along for the last bunch of months every week because there's important continuity as we lay out these most likely scenarios and then patiently wait for them to form. And we've been chopping around a lot and that's not surprising because when you form constricting ranges and you are in a balancing market environment, you get a lot of chop. And when you then see those constricting environments break, you get trends and trending markets to trade within. And they are two very different things. And as Joey always says, if you apply a balance playbook, I should say, if you apply a trending playbook to a balanced market, you're going to lose consistently. They're two very different things in terms of, you know, how long do you leave swing positions and do you leave day trade positions into swing positions for runners? Do you keep locking it in knowing that the chop is going to resurface? I mean so many days in the last couple of weeks we will see the inverse relationship between our major sectors where generally speaking if semiconductors are leading every almost everything else is weak and then the next day it completely flip-flops. Thursday semis were weak and a bunch of other sectors were strong and then Friday they completely shifted and it was the exact opposite especially I mean the easiest place to see it is software versus memory or semis software had a big-time bull day thanks to earnings help closed up 3.4% Thursday closed down 2.2% 2% Friday. That's a huge whiplash back and forth. And you look at what was SMH doing during that time. Fairly flat. Let's just go to memory. Small red on Thursday, big green on Friday. So again, it's just that that back and forth whiplash kind of action, which in a balance environment means for me taking profit faster, leaving less runners. It's also been stopping out of a lot of swing positions, break even. Uh but we are in balance and we're looking for weekly higher lows to be the most likely scenario and the burden is still on bears to prove to us that there's any red flags here because right now we've got the NASDAQ this bounce into a lower high and now there's tons of space for a higher low. If the higher low happens from here, it's a bull flag because the retracement size was roughly 45% at this point. And I generally call that the gray zone. But uh if you're holding weekly EMA 12 and if the S&P 500, which you're about to look at, is a potential bull flag for me, I would say the simple statement that if the NASDAQ holds this double bottom on the daily time frame, it's a bull flag. That's let's just keep it simple. That's that's the answer. If this holds, it's a bull flag. If this breaks, then that weekly equilibrium can continue tightening for a significant period of time into end of September and maybe even October. But we're going to stick to the daily right now because the NASDAQ is a nice and clear equilibrium. We topped out. We pulled back in daily stair step, lower high every single day. Inside bar, bull break. All right, bounce underway. Plenty of space for the lower high. It's now set. Double bottom at support. If the bears show up on Monday, it's an equilibrium. The lower high will be set and we're going to look to tighten up and it might be another boring holiday week. I just said Monday, Monday is closed. We got a 4-day week coming up. If Tuesday the bears show up and a daily lower high forms, we could remain within this daily equilibrium till Thursday, Friday fairly easily. And so then the direction that this breaks will dictate the most likely scenario on the weekly time frame potentially for September for me from there. And of course the FOMC is going to add volatility to that eventually. But uh right now it's the question Tuesday is do we form a daily lower high and keep tightening up? Because if not, if we double bottom and break resistance, the weekly higher low is set and we're then looking back at pretty much just two resistance zones. So with that, we know our components and here's the S&P 500. Again, keeping it simple if weekly EMA 12 is support. And I can't stress enough how important it is to be watching other things, multiple things to get the complete picture because if you're watching the S&P 500 on just the S&P 500 last week, we confirm a daily downtrend. We broke support here. And if if any bear is using that as a signal or bull is stopping out literally right at the temporary bottom before a solid bounce and that's a big fake out. But if you're watching the NASDAQ, you can say a simple statement which is what we said this past week. If the NASDAQ doesn't break support, the S&P 500 bear break isn't going anywhere. It's the confirmation that's needed. And I do this all the time with individual names and ETFs where if an individual name breaks a support but the ETF doesn't, that individual name is not going to follow through at all. And so it's it's a nice little extra confirmation to have. So, even if I did, let's just say I did short the S&P 500 on this bear break, I then can go to the NASDAQ and say, "Okay, I gotta watch this closely because if we hold this double bottom, I'm going to bail on that short pretty quickly because I know that it has to break as well." And it didn't. So, S&P 500 weekly EMA 12 is our full bull control guide. And I mean, again, I know it's a lot of choppy. I know it's a lot of back and forth and all that, but we just had the we just tied the third highest close in the history of the S&P 500 on the weekly chart. So, we forget that if we're too zoomed in on weaker sectors or if we're not zoomed out and taking the complete perspective here and everybody, you know, talking about the bonds and the the yields and the 30-year and the 10-year and all that. uh we're chopping around sideways and again I I just don't care much about this for how I trade the broader market just like when you know we had the back in in May of 2026 we had the highest 30year yield that we had seen in years at that point and the market I think we're higher or maybe where this is our chopping range May yeah we're slightly we're we're same same levels Okay. Anyways, I don't care much about, you know, I care about the narrative. I want to know what is the market feeding retail for them to be focusing on. And that's what it is. It's the yields and the rate hikes. And so, I'm aware of that and that tells me, okay, when we get data like Friday morning, I know there's going to be increased volatility because that's what the herd is focusing on. But that's as far as my caring about what those numbers are goes. know there's volatility at specific periods surrounding data release, but let the price dictate everything. And so, you know, the NASDAQ, we had a bearish reaction to that data being released Friday morning. And I'm looking around and seeing SMH gapping up. MU, DRAM, Memory, both gapping up, CRWV was gapping up. And I'm saying to myself, okay, if this is bearish data, why would these names be gapping up? That's glaring relative strength. That's where I'm going to focus on the day. Not only that, we had again when you identify balance, you know, to pump the brakes, but you also can identify when balancing ranges are coming to an apex and they're going to break. They can't get any tighter. And we had that on memory into Friday. We had MU 4hour. These are going to be rough lines for speed's sake, but we know volatility is coming here. We're extremely tight and we were gapping up and then we had the bearish reaction to data, but plenty of space for an hourly higher low. And so my mindset into the morning, this is from our actionable trades channel. And just a reminder, we got our free trials on chartguys.com. This is my last three months of daily chat room interaction. Get it while it's hot. I'm watching memory hourly higher lows on the morning because at that point in time we had pulled back pre-market with the data reaction but again tons of space for the hourly higher lows. So MU and DRAM are gapping up. SNDK was at the high of yesterday. First thing DRRAM had the same 4hour pattern breaking bull. And again, if you've been following along, we six weeks ago, this was anticipated as the most likely path forward for memory and semis. And again, it's not, you know, I'm not saying, look at me, look how good at my prediction was. It was this is the most likely scenario. I don't know the exact levels. You know, I didn't look down and say we're going to bounce right off 500. I just said we're going to find a low. We're going to bounce for multiple weeks. We're going to find a lower high. then we'll scout a higher low and a tightening range. And so that's now what we have. The bulls are trying to shape up the weekly higher low. We're right there. We could fairly easily set that this coming week. And again, the the market environment that we've been in right now, that is going to change. But the relationship is if semis are leading, everything's weaker. And the days when I look down in my Fidelity screen and I see the NYSE advanced decliners, it tells you, you know, how many are green, how many are red, what percent, when semis are leading, that number is 35 to 43% green versus red. And when semis are weaker, it's 65% are green. And so it's just this back and forth that's that's within this balance. And in an ideal world, if you're a bull, you want to see that NASDAQ sideways range break bull. You want to see the S&P 500 be a weekly bull flag, but you want to see that relationship shift where a bunch of things go up together because that's what's been missing in this balance environment. So, if SMH can break 56940 this week, the weekly higher low is set. And we're I mean, we're heading right into the FOMC to dictate the direction this breaks. If it breaks bull with a weekly uptrend confirming, we'll then be on the monthly and that is a potential monthly bull flag. Yes, I know we've run a bunch. Yes, I know the narrative is saturated, but until the bears prove to me that this is not a bull flag, it's on the table as a possibility. And we've got a monthly inside bar and we're working on our second one, but obviously the month just started. and drram weekly is similar but stronger in the sense that the weekly higher low is set. So top bottom lower higher low and if dram can break 6204 we have a weekly uptrend. Then we zoom out to the monthly and we have to say okay this one's a little bit different due to retracement size. So, it is possible that DRRAM then just gives us a tightening monthly range into the end of the year if that bull break were to take place. There's a bunch of, you know, subsectors that are doing very similar to things, whether it's Neo Clouds or photonics or whatever you're looking at. We just had BE get added to the S&P 500 after hours. So, it's going to be confirming its weekly uptrend to set the monthly higher low off EMA 12. And this chart is still in bull control. Bigger picture. It's still a monthly uptrend. If that's going to change, we would have to fail the all-time high and break that low. Burden is absolutely on bears. But a number of other, you know, MBIS. So MBIS tightening weekly range. We can stay this way for a while. Set that weekly higher low, bounce for a week, pull back. October's right around the corner. Other individual names just in these little subsectors can weekly high or low set. Can we confirm the weekly uptrend? If so, monthly continues to tighten. So, bulls are going to try and shape up these weekly trend changes as Nvidia is knocking on the door of all-time highs. We came within 1% on Friday. We pulled back, but that's the highest weekly close ever on Nvidia, the largest company in the world, right? Yeah. So, burdens on bears. Break that NASDAQ double bottom and I'll take a step back and reassess again. I just want to shut off my brain as much as possible to not overthink things and be jobs numbers and probabilities of right. No, if this line holds bullish. Turn off the bare side. If the line breaks, turn it back on and then reassess and then I have to start thinking. But if it's support, I'm not thinking other component. So software bullish earnings reaction. Software is a little tricky here because if we confirm this daily downtrend, I mean bears clearly defended 110. I had an aggressive swing position buying this dip, stopped out, break even. Uh that was certainly not surprising just because of how much we ran into it. But if we break 10260 and confirm this daily downtrend, we're going to have to be cautious of a monthly lower high shaping up. And again, from a broader market perspective, if software is going down, but semis and memory and all these subsectors are going up, then that's fine. that's, you know offsetting what software drag would be on the NASDAQ. Uh, but we're we have to watch the monthly here because again, this is a big drop and a big bounce. And when you have that much volatility in both directions, the most likely scenario is the equilibrium. Which is why over the last six weeks, we've been able to roughly anticipate what price action for semiconductors in memory would be because of the significant monster bull move, the significant pullback. We scout a tightening equilibrium range. And so I'd be doing that on IGV as well. Granted, I can, you know, look at this and say, well, I would have said the same thing back here. I would have said to look for the lower high in the tightening range and we didn't. That said, it's a little bit of a steeper hill to climb. Back here, we needed 40 5% for a new all-time high. This time, we would need almost 60%. But if this ends up being if we confirm a daily downtrend and head back towards 100, we will be potentially shaping up this monthly tightening range. So, just something to keep an eye on. And then the last component of the NASDAQ is MAGS. And MAGS was testing all-time highs thanks to the weight of Nvidia. But again, if you're looking at this market and saying, you know, well, where would strength come from if the NASDAQ's going to head, if the NASDAQ's going to break this weekly tightening range bullish, uh, a lot of the big tech names haven't been participating much. I mean, here's Meta. Meta is trying to form a three-month higher low off EMA 12. We just had a two-day equilibrium break bull where we were in a constricting range. Bull break takes place. 600 is back as support. From a weekly perspective, I'd be keeping an eye on this downtrending resistance line and this uptrending support line. Again, rough lines when I'm doing these on the fly here, but a constricting range where if this breaks bull, it's a three-month higher low being set. Google, we're looking for a weekly higher low to try and form. Technically, it formed last week, but again, we're chopping around and uh we could say Google has not done anything to benefit the S&P 500 over the last month. We've got Amazon. Amazon is looking for a higher low to try and form after its all-time high. Amazon has not been helping the NASDAQ out over the last month. My point is if the big tech names can get some bounce, that's going to help the NASDAQ head up to test resistance. Tesla, a lot of volatility with its still struggling at this weekly EMA 12, but bull move into its unveiling of the robo taxis and then profit taking giving it back. Tesla's going to have to confirm a weekly uptrend for me to be back on team bull. Uh convincingly, it's been a nice bounce, but again, anything under 433 is just a weekly lower high. So, if Tesla bulls can confirm a weekly uptrend, that would significantly shift momentum. Again, my point is, uh these big big names have not been helping bulls at all. Well, Tesla has a bit, but um there's plenty that haven't been helping bulls over the last month. And so if they shift, that is a tailwind for the NASDAQ. And again, best, you know, if if software is finding a monthly lower high, it will need to be semis and big tech. If the NASDAQ's going to head back to all-time highs, both of those will have to be going in the other direction. But again, it's just one day at a time because these correlations do keep shifting fairly significantly. But that's the NASDAQ and its components. Now, as far as our other major sectors, the financial sector hit an all-time high this week. Granted, no follow-through. We're still certainly struggling in this zone, but we're keeping higher lows. So, I'd be watching these trenches. Uh again, bulls hanging on, staying sideways, but right up near that all-time high. Healthcare to date EMA 12 rider is my guide. If we drop down and break 16920, that is a clear bear break that would have us watching the potential of monthly consolidation on XLV. Best case scenario for the bulls would be to hold that level and head back up to all-time high. Obviously, if that were to happen, I'm watching ABBV. I like the clear ranges on ABBV. We're tightening up on the daily, just under all-time highs. We've got the biotech sector tightening up. Look at the 4our here. Bulls need to show up to start this coming week to remain within this constricting 4hour range. So, lots of different places to be looking around, but again, zoomed out perspective, we've got our line in the sand for the NASDAQ, and that's all I care about for September. If this holds, we're breaking bull. If this breaks, step back, reassess, take off the bull glasses a bit and and ensure that, you know, I'm hedged up more and protective more, but not just yet. And a bunch of the other sectors had a bunch of weakness. They're much less impact on the broader market, but industrials dropped down to daily oversold this past week. uh materials chopping sideways. Transportation dropped down a daily oversold. So you got some sectors showing weakness, but S&P 500 not reacting significantly. I should say not being negatively impacted significantly. I'm just sticking with burdens on bears. Lose the S&P 500 weekly EMA 12. I'll step back and shift. And that won't happen unless the NASDAQ breaks that double bottom. So, it's the NASDAQ double bottom. How many times have I mentioned that so far in this video? All right. Crypto stocks have had some strength. CRCL is standing out. I want to show the example here of just EMA 12, which you know, we love EMA Rider webinar. If you Google chart guys EMA Rider, and previous resistance turning into support. So, here's an example of bears taking control. Daily downtrend, lower high, lower low, lower high, lower low. We then trade sideways after clear bear control. And it's just the EMAs waiting for them to catch up. So, once you already have a strong established trend, sideways is almost just like biting time before continuation. It can be reversals, but more often than not, it will be continuation. It's why we say the trend is your friend. And so it just trades sideways while EMA12 comes down. We kiss EMA12 and it's almost like a wall that you bounce off of and see another leg down. So then we watch that resistant zone. We break above it. We trade sideways. We patiently wait for EMA 12. Boing, we just bounce right off of it into continuation. So same zone in one instance hard resistance while EMA2 drives it down in one instance support while EMA12 drives it up and CRCL monthly is a tightening range all-time low top of the bounce as a double top higher low and it's going to be all about 140 definitely possible we remain within this tightening range for a while but uh a clear lead bull in crypto stocks. And another name I'm watching is CLSK. Not nearly as much of a crypto stock as it used to be and as my understanding uh I don't really care. What I care about is this is a really nice monthly constricting balance range. And when it breaks, we're going to look for follow-through. I'm just viewing this like this. And we're scouting a monthly higher low. So, if we could say, okay, a monthly higher low is the most likely scenario compared to $8. I then zoom in and look for a bullish pattern telling me the monthly higher low is shaping up. And we did this with Bitcoin as well, watching for the falling wedge. But this is a potential falling wedge on the daily for a monthly higher low to be set. And as we know, falling wedges and rising wedges often turn into head and shoulders or inverse head and shoulders. So, if we were to stall out around the 1330s resistance zone, it would then be up to the bulls to confirm a daily trend change to break this pattern bullish. But I'm watching CLSK for the first time probably this year for this potential pattern. And then a swing trade thesis would be that's the monthly higher low or I'm wrong. That said, that's 20% risk in this moment. That's a lot. So, have to position size accordingly. But that's one thing I'm paying attention to because there's a lot of things trying to form monthly higher lows in the current market environment. The dollar still on the weaker side inside bar Friday. I'm just watching the low and this resistance zone. These are the two levels I care about. If neither of these levels are breaking, nothing is changing. Metals have had some significant volatility. So, gold, the big question is, can the bears confirm the daily downtrend? If no, this is a healthy weekly higher low after the recent bull break. If yes, bulls need to step back and reassess because again in this moment in terms of retracement size, that was 50% plus retracement. And if we break the low from here, that's going to be very significant retracement. And then we'll just be watching for this. For me, again, it's it's probably going to be the FOMC that dictates whether we head back up to continuation of the bounce or whether we head back towards support. But for this coming week, do we confirm the daily downtrend or do we hold this low and continue to recover? And we had a nice super stack. And again, our super stack is when things are very extreme on a bunch of time frames aligned. So when gold hit this bottom, we were at extremes on the 4 hour, the hourly, the 30 minute, 15 minute, 5 minute, all at the same time. And when that aligns with a longer term most likely scenario, whether it's a weekly higher low or daily higher low, whatever, that's when I'm much more interested in these bounces. So this day I was trading gold miners bullish. It had a really nice morning. But gold being that oversold was a factor. Silver. Same same question. Do we confirm the daily downtrend? If we do, I'm going to lighten up silver. I already did take a little profit. I forget exactly what point. Somewhere up here in my silver swing position from down here. But if we break this zone, I will lighten up further because that would be a bit of a shorterterm red flag. If we hold it, there are no red flags on this weekly and we're trying to shape up the weekly trend change for monthly bounce follow-through. So that's what I care. I care this coming week. NASDAQ double bottom, does that hold or break? And metals, do we confirm the daily downtrends or not? and the miners holding on better, much better. I mean, look at this weekly chart for GDX. That's a potential bull flag. Whereas gold, again, just look at the retracement sizes. Gold gave back over half of its move from the lows. I'm going to go from the actual lows. Miners gave back 30 35% at most. gold. Let's go from the low. Yeah, over 50%. Miners are so much stronger. Oil testing recent highs trying to follow through. And again, we got to be cautious. Not cautious, but it's entirely possible oil tightens up into next year. What would that look like? A monthly lower high eventually compared to 108.882 82 and an equilibrium, significant breakout, significant pullback, scout a tightening range. Again, it's not going to happen every time, but even if it happens 75% of the time, that's very worthwhile in terms of anticipating balance after the volatility information. whether it's a massive breakdown and then a big 50% plus bounce retracement or vice versa that's when we scout them and their little nuances liquidity if it's a penny stock the less likely scenario can certainly take place etc but on oil I'm definitely watching for the potential of a monthly lower high and constricting range into 2027 I do have an energy sector runner after buying the third gap down hoping I'm hoping a new daily higher low gets set here and I'll walk up my stop. But we're still in blue sky breakout and still strong in an uptrend and energy is stronger than oil just as the fact that we're at higher highs while oil is not. Uh but daily uptrend guide here for me. This is a higher low and we're trying for a new higher low compared to that level. So, I'm focusing on, you know, I've still got a drram memory swing. I like I like that that volatility is back for day trading memory. Uh, the question is NASDAQ double bottom. Does it hold metals? Do bears confirm daily downtrends or do bulls shape up a healthy weekly higher low by fending that off? And then I care about all these, you know, semis, memory, neoclouds, all these things. Can they set weekly higher lows and confirm weekly uptrends for us to then zoom out to the monthly and get some perspective or not? And again, in this market environment, swing trading has been more tricky because as I mentioned that one day to the next is just whiplash in terms of lead bulls and lead bears and then lead bulls and lead bears 24 hours later. But we will look for this tightening balance range in the NASDAQ and in many places to resolve itself and then lead to a trending environment again. And just let's see if we can find a recent example of that. Here was an example where it was the sideways balancing choppy and the bears came out on top. Little bit of a tighter range there, but again, I just really like this clarity. And yes, it's not ideal trading environment, but at least there's not tons of fake outs. At least it's not, you know, a bare break of key support and then a a fake out right back when we rip. It's just a standard tightening equilibrium. Scouting a weekly higher low is the most likely scenario. And the FOMC is shaping up. Just knowing timing. I forget when the FOMC is specifically, but we're tightening up September 15th. So, yeah, it's real close. So, four, so 16th. Yeah, six trading days. Yeah, FOMC reaction is definitely going to be a dictator of how many of these tightening ranges break. And again, you know, we keep getting these probabilities that a rate hike is more likely than not, while retail, just retail sentiment is what are you talking about? I can't imagine a rate hike with, you know, Trump screaming rate cut and the the elections coming up and not wanting to piss off the guy that put him in. Uh, it's hard to imagine, but we'll see. One day at a time, lay out what is most important. Shut off your brain. As long as you have that clear, definitive statement that can dictate things. And again, the EMA2 riders are great for shutting off your brain. That's what I've done on the S&P 500 weekly for months at this point. And we'll see. Hopefully, we're coming to an end of summer trading because again, spies volume has been real low. But volatility should be kicked off by the FOMC reaction and then likely carry into October from there. All right, do good things. Appreciate you watching. Giant snapping turtle has been migrating. There's there's a few big ponds in the neighborhood and creeks and I've been watching this guy for three or four years. I'll see him in the creek connecting. I'll see him crossing the road. I'll see him in my pond. Uh he's a beast. But I have to go into my pond and remove some invasive parrot feather plants this fall. And I'm not liking that. That's where he's living right now.