In this post, I’ll focus on setups that I’m monitoring for both long and short positions. With a chart and short write-up, this is a quick way to scan and plan potential trades.
These ideas are the end result of my process to identify stocks offering the right combination of growth fundamentals along with a proper chart setup. Live alerts are sent to Traders Hub members only.
Stock Market Update
While major market indexes like the S&P 500 appear to be grinding sideways in recent sessions, large moves are underway elsewhere as recent inflation reports drive volatility in interest rates across the yield curve. The 30-year Treasury yield is holding onto a breakout above the 5% level, which had been resistance for an ascending triangle pattern that’s been forming since late 2023 (chart below). At the same time, market-implied odds continuing pulling forward odds for a rate hike. The chances for a rate hike from the current fed funds range of 3.50-3.75% jumps to over 60% at the Federal Reserve’s December meeting.
Indexes like the S&P 500 and Nasdaq are holding near record highs as concentration in mega-cap stocks linked to the AI infrastructure buildout remain buoyant. But elsewhere in the market, the average stock is reflecting the jump in inflation and impact on interest rates. The NYSE cumulative advance/decline line is pulling back sharply while the percent of stocks trading in short-term uptrends drops as well. The percent of stocks across major exchanges trading above their 20-day moving average fell to 33% recently, which is lowest level since the broader market selloff into late March (chart below).
The average stock has been diverging negatively to the major indexes, which has been limiting breakout trading opportunities. But an oversold breadth condition is already forming, which is also being confirmed by the MACD applied to the stocks trading above their 20-day MA. That could help spark a rally at least in the near-term and see the average stock catch up. Keep reading to see:
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