DailyPlay Update – May 20th, 2022

As we head into Friday’s action, bullish traders can cling to the fact that the weekly QQQ chart’s Lagging Line still has not breached the cloud bottom beneath it (highlighted in the below chart in a yellow ellipse). From a trader’s perspective, this last place a structural bull market lies before it turns into a bearish one is also the lowest risk (i.e., tightest sell-stop) place you can buy. (Think about it: almost anytime else that you’d be buying in an upward moving market, your sell-stop would have to risk far more money than what it would need to here and now.) 

QQQ – Weekly

Moreover, the daily QQQ chart is still within the context of its first and only Combo -13 signal of the whole 2022 decline, also suggesting downside exhaustion is at hand if the price keeps above $277.81.

QQQ- Daily

So, today’s close becomes very important by telling us if the weekly cloud model can continue holding onto its last support level before it structurally turns pure bearish & into an even more defined “sell-on-rally” mode. I mentioned to you in Monday’s morning weekly outlook webinar that I had purchased some SPYs for myself at $391, knowing that right near there was a key area from its weekly cloud chart (and also knowing that the Qs Lagging Line was quickly nearing its last bullish support level). I’m hanging on to that trade for now, but also know that I’m out of it if these aforementioned levels give way.

None of us know which way the market is going to move in a single day, and based upon some of the recent price action, even the algos are getting as pummeled as anyone else who is playing the game. But what I can do and consistently alert you to are the most important levels that institutions care about and shift money against. (And as I said in my presentation last week in Las Vegas at The Money Show to the crowd who heard me speak, it’s not an oversold RSI, or a 20-day moving average, or a Fibonacci retracement, or the like that moves institutional money. It’s far more so than the models that I continually present to you each and every day at the core of the work we do. And believe me, it’s the institutional money flows that you want to be aligned with; not those of the individual investor.

Enjoy the weekend.  We’re right back at it Monday morning at 8:45 am ET with next week’s Market Outlook webinar