Let’s keep it simple.

After nine consecutive weeks of gains through April and May, the market decided June would be a month of consolidation. A little giving back. A little profit-taking. A healthy reminder that stocks don't move in a straight line forever.

Over the last fortnight, the 50dema was tested. And held.

The AVWAP from the Megagap of April 8 was tested. And held.

Gaps were filled. Narratives were challenged. Conviction was tested.

And for late buyers, pain was felt.

Yet despite all of that, last week’s close offers reason for optimism. Looking at SPY, price closed above both the 20-day EMA and the all-time high AVWAP.

What’s more, my Risk Composite Model re-entered the green zone, with the VIX falling back below the 50dema during Friday’s session.

Long story short, if SPY can continue to climb above 740 next week, my plan is simple: re-engage. Buy calls. Press the gas. And lean back into the same aggressive mindset that served so well throughout April and May.

Until price tells me otherwise, I see no reason to assume this is anything more sinister than a normal consolidation after an exceptional run.

SPY/QQQ

A hammer candle after buyers stepped in a the 50dema (red line) and Megagap™️ AVWAP (turquoise) - setting up a tasty looking reversal on the weekly. So long as buyers defend SPY 740 and QQQ 687, I’m in dip buying mode.

IGV

After playing the initial pop before watching late chasers get smoked over the last few weeks, there’s probably enough blood on the streets for me to get interested again as far as software is concerned - at least in the short term. Great RR with stops below the Q1 AWVAP (turquoise).

NOW above 101 is my pick of the bunch in this space. ORCL above 190 is a close second. TEAM above 88 not bad in third.

RGTI

RR is there on RGTI above the 50dema (red line) and prior low AVWAP (turquoise). Inverted head and shoulders pattern on the daily showing a neckline retest. Risky one - this one moves fast. But what’s life without a little spice?

ADEA

Not the cleanest breakout but a breakout nonetheless. Happy holding this position above the 50DEMA and adding calls above the prior low AVWAP (turquoise). Another risky one.

SOCL

Not the most liquid of ETFs, but SOCL held up well during the last couple of weeks, which means I’m interested - especially above the AVWAP from the Q1 lows. Key holdings include META, RDDT and SPOT. Watch the latter for a potential IHS breakout from a well defined bottoming formation.

NVDA

If we’re going higher, semis won’t be sitting on the sidelines. NVDA needs to reclaim the 50dema (red line) and AVWAP from the Q1 lows in the short term. Confidence grows above 207. A break below last week’s low spells trouble IMO. One to watch.

Long and Short of It

After two weeks of consolidation, multiple tests of support, and no shortage of bearish narratives, the bulls are still standing.

Could that change next week? Of course.

But until it does, I’m happy giving the benefit of the doubt to the trend that has been in place since April.

My risk models have done a great job of telling me when to push and when to tighten up over the last few months - and as long as we stay in the green zone, I’m not going to fade it.

As always, price gets the final say.

Let’s have a great week.

Best,

Al

Disclaimer: The content provided by Al Trades Charts is for educational and informational purposes only and should not be considered financial advice. I am not a financial adviser. All opinions are my own and reflect my personal interpretation of market conditions at the time of publication. Trading and investing involve risk, and you should always conduct your own research, consider your financial circumstances, and consult a qualified professional before making any investment decisions.

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Narratives are cosy, familiar and something that human beings typically cling to as a means to justify every event that’s transpired since the dawn of time.

Ze Germans lost the war because Hitler invaded Russia.

The Titanic sank because the Captain fell asleep.

Stocks are falling because…

Granted, those are deliberately simplistic examples, but you get the point.

Humans are wired to search for cause and effect. We crave neat explanations, clean conclusions and villains we can point to when things go wrong. Narratives serve a purpose, but only up to a point.

Beyond that, they often become a lazy shortcut - a convenient substitute for the uncomfortable reality that most outcomes are driven by a messy combination of factors, probabilities and unintended consequences.

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Markets are perhaps the best example of this.

At one extreme, every down day is framed as the beginning of some mythical bubble bursting. At the other, we’re handed a more respectable-sounding explanation - the Strait of Hormuz, bond yields, tariffs, inflation, take your pick.

And yet stocks spent the best part of two months grinding higher while many of these same narratives were being peddled as reasons to stay bearish.

Then, the moment price moves in the opposite direction, they’re dusted off and repackaged as the obvious explanation.

Which is precisely why it's dangerous to anchor your investment process to headlines. More often than not, they're explaining what already happened, not what's about to happen.

Because what’s about to happen, might actually be something much less dramatic.

Here’s a chart I shared on X yesterday. On it, you’ll see I’ve annotated some key levels on interest - most importantly, in my view at the least, the turquoise line which represents the AVWAP from the ‘Megagap™️’ move of Wednesday April 8.

Here’s how the same chart looks today…

The gap has been filled and the AVWAP and 50dema are being tested.

And yet despite this irrefutable fact, provided by nothing other than price action on a chart, we’re already seeing the usual narratives being peddled to explain what may well turn out to be healthy retest of support after a monster rally.

The Strait of Hormuz.

Trump has lost control of the war.

The bubble is bursting.

We’re all going to die.

Bears, naturally, are among those shouting the loudest. And who could blame them? After spending nine straight weeks on the sidelines, shaking their fists at the sky while the S&P 500 marched higher, it’s easy to understand why they’re so angry.

But price doesn’t care. Not what the bears think, nor what I think. And it certainly doesn’t care about the latest narrative du' jour.

So what am I doing?

Pretty much the same thing I’ve been doing since the rally began: respecting price.

That doesn’t mean blindly buying every dip or pretending risk doesn’t exist. Quite the opposite. If this pullback develops into something more meaningful, I want to be ready for it.

For me, that means tightening things up beneath the 20-day EMA, respecting key anchored VWAPs and generally trading a little lighter than I was a few weeks ago when breadth, momentum and trend were all firing on all cylinders.

The gap has now been filled. The AVWAP from the April lows is being tested. The 50-day EMA is right there too. These are exactly the types of levels you’d expect price to interact with after a near-vertical move higher.

If support fails, I’ll adjust accordingly. If it holds, then this may simply prove to be another pause within a broader uptrend.

The important point is that the chart will tell us. Not X. Not CNBC. Not the guy who’s spent the last two months predicting a crash that never arrived.

Until then, I see little value in forcing a narrative onto what currently looks like a fairly ordinary test of support.

In the meantime, maybe go touch some grass.

Best,

Alex

This week, the S&P 500 notched its longest winning streak since April-May of last year.

All while the Strait of Hormuz remained closed, oil traded north of $90 a barrel and bond yields across the globe hovered near multi-year highs.

A truly fascinating (and occasionally hilarious) environment to trade.

While the macro crowd has spent the last few weeks either sitting on their hands or embarrassing themselves on X, technical traders have been doing what they do best: buying strength, respecting the trend and riding moving averages higher as stocks continue to climb the wall of worry.

Personally, it’s been one of my strongest quarters to date.

After successfully playing the April bounce and correctly calling the great renaiSAASance in May, my focus for June remains refreshingly simple: stick to the process, stay aligned with the tape and continue making money.

For those of you that signed-up for the paid tier, the live trading room enjoyed another fruitful month. Based on just one contract per trade, total profits for the month totaled $1,260, giving us a running total for Q2 of $6,020.

If this reads a little like a victory lap, so be it.

Markets like the one we’re trading right now don’t come around every day. And when opportunity presents itself and you’ve got the conviction and discipline to act on it, I think it’s important to acknowledge that.

That said, the market doesn’t care what happened yesterday. The only question that matters now is whether the conditions that got us here remain intact.

Is Breadth Deteriorating?

One development that caught my attention this week was the deterioration in market breadth.

Over the last five trading sessions, the S&P 500 has recorded negative breadth every single day. In other words, the index continues to grind higher, but fewer stocks are helping to do the heavy lifting.

Since the start of 2024, we’ve seen only three other instances where negative breadth persisted for five or more consecutive sessions. Each eventually stretched to at least six days, including an unusually long 14-day streak in late 2024.

How did the S&P 500 perform after these instances - shout out to Frank Cappelleri for the chart.

There’s also a noticeable divergence in play between the S&P 500 notching ATHs whilst the percentage of stocks trading above the 20, 50 and 200dma remains pinned below the highs set in April.

For now, I think the sensible approach is to treat these breadth metrics as a yellow flag rather than a red one.

Breadth measures like these are incredibly useful for understanding what’s happening beneath the surface, but they rarely pay to be viewed in isolation. As long as the major indices remain above key moving averages and leadership groups continue to hold their uptrends, the weight of the evidence still favours the bulls.

Could these divergences eventually matter? Absolutely.

But history suggests that markets can remain narrow for longer than many expect. Until price starts confirming the weakness, I’m inclined to give stocks the benefit of the doubt and allow time for participation to catch up with the advance.

Which brings us to the more important question: where does the opportunity lie from here?

Where I’m fishing for the next trade

With software now catching a meaningful bid and a number of names in the long-term portfolio continuing to cook, I’m reluctant to spend too much time retreading old ground.

Instead, I’d much rather focus my attention on areas of the market that looked primed for a new impulsive leg higher - and right now, that focus is squarely on financials and communications.

Whilst my JPM calls were likely premature, I’m happy holding them so long as XLF holds this bullish flag pattern (specifically above the AVWAP front he prior lows). Confidence grows above the 200DEMA shown in blue, with a breakout ahead of next month’s earnings season providing a great opportunity in some of the space’s more unloved names (hence, JPM calls).

As far as XLC goes, it’s an eerily similar setup - with one clear caveat. Weightings.

Specifically, META - which currently boasts the largest weighting in XLC at 23%. If META catches a bid above the AVWAP from the prior low at 615, I’d be reluctant to bet against XLC breaking higher from the flag shown below.

If XLC does start to move, one ticker to keep an eye on is NFLX - which currently finds itself at an interesting level having given back a lot of the gains made earlier this year.

Don’t forget the leaders

While I love fishing in underappreciated waters, it’s important to recognise the areas of the market that continue to work away in the background. Yes, this includes SMH - but also pockets of the market exposed to base and industrial metals, as well as other inflation-sensitive sectors such as fertilisers.

A few tickers worth looking at this space

FCX

CLF

MOS

HBM

And lastly, a place where NOBODY is looking

Maybe I’m still feeling a little too pleased with myself after the software call, but I can’t help looking for other corners of the market that may have fallen victim to similarly flawed narratives.

Which brings me to sports betting.

More specifically, I quite like the look of FLUT and DKNG at current levels. Here’s the latter’s chart:

The prevailing view seems to be that prediction markets are about to eat their lunch. Maybe. But that strikes me as one of those stories that sounds far more compelling on social media than it does in the real world.

Yes, prediction markets have grown at a remarkable pace, and yes, they’ve undoubtedly stolen some mindshare from traditional sportsbooks. But investors seem to have jumped straight from “interesting new competitor” to “existential threat” in record time.

Meanwhile, DraftKings just delivered 17% year-over-year revenue growth, generated record quarterly EBITDA, and noted that prediction markets have had only a negligible impact on sportsbook revenue thus far.

Consumer activity on its own predictions platform is growing rapidly, and management appears more interested in joining the trend than fighting it.

Flutter’s situation looks similar.

Despite all the handwringing, FanDuel remains the dominant player in U.S. sports betting, and management continues to describe the impact from prediction markets as minimal. In fact, they’re investing heavily in their own prediction market offerings rather than retreating from the space.

The market appears to be pricing these businesses as though prediction markets are about to replace sportsbooks altogether. The reality may be far less dramatic. Most bettors aren’t looking to become traders. They want parlays, same-game multis, boosts, loyalty rewards, slick apps and a familiar betting experience. Prediction markets may grow the pie rather than simply steal it.

Could Kalshi and others take share? Of course. But there’s a world of difference between “competition is increasing” and “the investment case is broken.”

As things stand, the market seems convinced of the latter. I’m not so sure.

Closing thoughts

As we head into the second half of the year, my biggest takeaway remains unchanged: this is a market that continues to reward conviction.

Not recklessness. Not blind optimism. Conviction.

After all, the S&P 500 has spent the last few weeks grinding higher despite a closed Strait of Hormuz, oil north of $90, and bond yields hovering near multi-year highs. In almost any other environment, those would be considered meaningful headwinds. Yet here we are.

That’s not an argument for ignoring risk. It’s simply an acknowledgement of what price is telling us.

If stocks can continue climbing the wall of worry with all of those concerns hanging over the market, it’s worth asking how much further they might travel should some of those fears begin to fade. And in that context, SPX 8000 doesn’t sound too wild.

Maybe that’s the optimist in me talking.

But optimism, backed by a disciplined process and a willingness to follow the tape, has paid remarkably well throughout Q2. Until the market gives me a compelling reason to think otherwise, I’m inclined to keep giving it the benefit of the doubt.

5 restracks and 5 likes and I’ll make the paid trading chat free for the month.

Best,

Al

Disclaimer: This content is for informational and educational purposes only and should not be construed as financial advice. I am not your financial adviser. Always conduct your own research, consider your personal circumstances, and consult a qualified professional before making any investment decisions.

…software finally looks ready to step up here.

IGV is breaking back above the 200dema, with cyber names leading the charge.

Now the question becomes: who follows?

MSFT and PLTR still look like prime candidates if software breadth keeps improving. And if risk appetite really starts expanding again? Don’t rule out crypto joining the party too. I’m looking at you here HOOD.

Meanwhile, patience still feels like the smarter play in XLF. The setup’s interesting, but the tape hasn’t quite given the all-clear yet. Maybe it comes tomorrow, maybe next week. But if we’re going higher, I don’t want to see financials breaking down here!

New video live now - charts, levels and the rotation thesis broken down in full.

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Over the last few months, I’ve had a lot of fun framing the market through movie analogies and cinematic storytelling. It helped make sense of an increasingly chaotic tape - and, frankly, kept things entertaining.

But moving forward, I want to simplify things.

Rather than comparing every market regime to a Hollywood blockbuster, I’ll be focusing more on regular video updates breaking down my favourite setups, key levels, leadership themes and actionable opportunities as they develop in real time.

Alongside that, I’ll still be publishing the occasional deep-dive newsletter covering the bigger picture stuff I’m seeing under the hood - macro trends, risk models, breadth, sector rotation, liquidity and the overall health of the tape.

The goal is simple: less theatre, more clarity.

As always, thanks for reading, watching and being part of this little corner of the internet.

Let’s keep stacking good trades.

Al

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Why? Because if these names can reclaim that level with conviction, it likely signals a market environment where we can start getting more aggressive with risk exposure again - especially beyond the usual mega cap leadership.

Think of this less as prediction and more as preparation. Build the watchlist now, so you’re ready if the market starts opening the door.

A few charts in this video are already starting to lean that way 👀

As always, not financial advice. Do your own research.

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MVPs are the lifeblood of successful teams.

The Dodgers have Ohtani. The Yankees, Judge.

When these players are swinging, good things tend to happen for their respective teams. When they’re not, the opposite rings true - with a disproportionate amount of blame falling on those with the broadest shoulders (and beefiest salaries).

But what’s often forgotten in an age that values individual brilliance and celebrity, is that no matter how good the individual, its the supporting team around them that truly makes the difference when it comes to the crunch.

The movie Moneyball brings this truism to life.

Led by Brad Pitt’s Billy Beane, Oakland A’s built a roster around overlooked players who quietly got on base and kept the machine moving. And the results - well, no spoilers here, but it didn’t work out too bad in the end.

That’s what healthy markets tend to look like, too.

And in my view, the next leg higher in this bull run boils down to just that.

Not just semis swinging homers every week, but the bench stepping up to the plate and getting on base too.

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Playing Conditions Look Good

Before taking a look at some of the benchwarmers primed and ready to take the field, a scout’s report on the current regime.

Risk models - which can now be accessed here, for free - remain in the all-clear zone, with credit spreads and volatility trading at the lower bounds of the range.

Breadth remains the primary concern here, with the percentage of S&P 500 stocks trading above their respective 50dema dropping to below 50% as of yesterday’s close.

Am I concerned about breadth in isolation? Not really.

Some will point to the slight deterioration over the last couple of weeks as a reason to tighten up. But I prefer viewing breadth as part of a wider composite and right now, most of the tickers I track within that framework are still giving the green light.

Until that changes, I’m willing to give the rotation thesis detailed below a chance to play out.

Benchwarmers Taking the Field

As detailed in last week’s post, I have little to no interest in chasing semis up here.

Instead, I’m scanning the market for those downtrodden areas that look primed and ready to breakout and keep the bull market swinging.

Top of the order, you guessed it…software.

Here’s a super quick view of IGV. Note the huge volume spikes at critical support, as well as price trending higher above the AVWAP from the prior lows, as well as the now upwardly-mobile 20DEMA and 50DEMA.

Dig beneath the surface of IGV and you’ll find MSFT. To me, this looks primed and ready for a major move. Above the diagonal purple line is what I’m looking for here, and feel comfortable holding calls above the AVWAP from the prior lows (green line).

Next up, healthcare. Specifically IHE.

Huge volume spikes and coiled moving averages, inject it baby!

Like software, this looks primed for a big move - and so long as price holds above the AVWAP from the prior highs, I’m happy siding with the bulls on this one.

My favorite name in this space, BMY.

Cup and handle. Inverted head and shoulders. I don’t care what you want to call it. To me this looks primed and ready to resolve higher from its multi-month base.

Last but by no means least, XLF.

Looks good to go, no?

Bulls get this thing cooking above that diagonal purple line and it’s game on.

JPM is my preferred vehicle for trading this thesis. Price holding above major support and the AVWAP from prior lows. Work to do to capture those key EMAs, but I’m happy holding until we see a decisive close below this week’s low.

Potential Curveball

For every team that wins the World Series, most never even get the chance to swing the bat.

Markets aren’t dissimilar in this regard. Even in strong bull runs, leadership narrows, rotations stall, and plenty of stocks get left stranded in the dugout (pour one out for your homies that own NKE).

Right now, the broader setup still looks capable of going the distance. The tape is constructive, key risk gauges remain supportive, and potential rotation under the surface is helping keep the playoff dream alive.

But this is no victory lap.

There are still more than a few pitchers warming up with curveballs capable of blowing up the bull thesis altogether - sticky inflation, rising yields, weakening breadth, geopolitical risk, and an increasingly crowded AI trade among them.

The game’s still on, no doubt.

But whether this run can go the distance relies on whether the bench step onto the field whilst the MVPs take a much-needed breather.

Best,

Alex

I’ve just launched a new chatroom for all subscribers: Watchlist & Setups.

No fluff. No “BREAKING 🚨” every five minutes. Just a focused stream of annotated charts, levels, and tickers currently on my radar.

Inside the chat I’ll be sharing:

• Stocks and sectors I’m actively watching

• Key support/resistance levels

• Annotated chart setups

• Relative strength and leadership names

• Potential breakout/breakdown candidates

• The occasional “this looks horrendous, avoid it” chart too

Not every chart becomes a trade. Not every setup triggers. But it’s the cleanest way for me to share what’s actually on my screen in real time.

What About Trade Alerts?

The Trade Alerts chat remains reserved for paid subscribers only.

That’s where I share actual positions, entries, exits, updates and higher-conviction ideas in real time.

But Watchlist & Setups gives everyone access to the process behind the scenes - the names, levels and themes I’m tracking before they potentially evolve into trades.

Available to all subscribers. Click here to access the chat.

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I’m not an economist.

But given said collective’s record when it comes to forecasting economic output and equity performance, I’m definitely not complaining. As the old saying goes, the only reason God created economists was to make weathermen look good.

At the time of writing, the usual suspects are doing their best to scare you.

This includes the leading academics you’ve seen doing the rounds on the BBC and CNBC, as well as some of the more niche names you’ve undoubtedly come across on social media.

Here’s a smart-sounding take from Henrik Zeberg, shared last week…

And here’s another, equally smart sounding take from the same account, posted back in December 2024 - just months before we saw one of the greatest bull runs in recent memory…

The point here isn’t to dunk on the likes of Henrik Zeberg or any other economist for that matter. I’m sure they have their reasons for being so bearish on the economy (those subs won’t sell themselves!).

Instead, I’d simply like to highlight that for as long as I can remember, economists have been getting it wrong. Or to put it bluntly, straight up lying to us for years.

Data Don’t Lie

Human beings lie all the time. Whether we’re lying to ourselves or others, it’s just part of the deal.

But data is different.

Data doesn’t care about political affiliations, TV ratings, engagement farming, or whether some economist on CNBC needs to justify the forecast they made six months ago.

It just is.

That doesn’t mean data can’t be interpreted poorly. It can. But raw numbers don’t wake up in the morning deciding to push a narrative. They don’t get emotional. They don’t go on podcasts. They don’t panic because the S&P is down 2% or suddenly declare a “new paradigm” after three green candles.

And that’s why I started building my own economic dashboard.

What you're looking at here is a composite of leading indicators, namely: building permits, housing starts, single family permits, 10Y-2Y spreads, initial jobless claims, weekly hrs worked and manufacturing orders from 1990 to March of this year.

The red line shows the 6mma, yellow shaded areas are recessionary periods.

What you'll notice is that prior to each recessionary period shown on the chart, leading indicators trended lower for a number of months (24 prior to the 2008 GFC) prior to each recession hitting.

No duh, leading indicators doing exactly what they're supposed to do!

Where Are We Now?

Just look at the chart.

When the composite moves from the bottom left to the top right, it signals the US economy is in an expansionary phase - good news for bulls.

When the opposite happens - and the blue/red lines trend lower - contraction is in play, often preceding recessionary periods like those witnessed in 2008.

Right now, both lines are trending higher, having recovered strongly after the slowdown seen throughout 2021 and 2022 - which, not coincidentally, aligned with the market’s last meaningful bear market.

Could this change as early as next month? Sure - but trying to predict it is akin to reading tea leaves. So for now I’m happy sticking with the data we actually have.

On that note, it’s important to understand that economic data is never truly “live.” Almost every datapoint in this chart is released with a lag. Building permits, manufacturing surveys, employment data, claims, credit conditions - they all arrive weeks after the month they actually represent.

In other words, we’re always looking slightly through the rear-view mirror.

But markets are forward-looking.

That’s why I focus less on individual data points and more on the direction of the composite itself.

Is the weight of the evidence improving or deteriorating?
Are leading indicators stabilizing or rolling over?
Is economic momentum accelerating or fading?

Right now, despite all the doom-scrolling, panic headlines, and endless recession predictions, this chart simply doesn’t look like an economy in collapse.

Have a great week.

Best,

Alex

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In Star Wars, the Empire built the Death Star. Massive, expensive, technologically overwhelming.

And whilst I’m not sure anyone residing in a galaxy far, far away traded the move - 3x leveraged lightsaber ETFs, anyone? - it’s fun to predict where money would’ve flowed had Obi Wan been granted access to a Robinhood account.

Thankfully here on earth, we don’t need to speculate how the creation of our own ‘Death Star’ looks - we’ve lived it for the best part of four years.

During this time, markets have obsessed over AI infrastructure: chips, data centers, nuclear power, cooling, hyperscale capex. The equivalent of watching the Empire assemble giant space stations across the galaxy - but with more dollars and fewer Storm Troopers.

Meanwhile, software drifted into the background. Slower growth. Multiple compression. The death of SaaS as we know it!

But lately, that narrative has started to shift. And if recent price action is any indication, the opening titles of the Software Strikes Back might be about to begin.

Dun dun dun du-duuun dun du-duuun…
DA DA DA DAAAAA… da-da da da daaaaa…

A Notable Divergence

Software vs Semis. You know the story by now: two key constituents within tech trading like the Jedi and the Sith - one good, one down right awful - so much so that as recently as this week, software broke to new all time lows relative to semis.

Sounds pretty good if you’re long semis and short software, right?

Not for me. I’m seeing this move differently to most.

Sure, picks and shovels have definitely been the trade for the last six weeks, but given the extreme levels we’re now seeing on the RSI - as well as the clear divergence that’s now in play on the daily and weekly timeframe - I’m willing to allocate some capital into software in anticipation of favorable rotation.

Return of the Bid: Bottom Fishing Software Stocks

As any Storm Trooper could tell you, charging blindly into battle usually ends badly.

That’s the danger with bottom fishing software stocks. After months of underperformance, crushed sentiment and “SaaS is dead” narratives, it’s tempting to start swinging at every oversold chart that flashes green for a day.

But that’s not how to play this thesis - not in my book anyway.

Instead, I prefer to enter trades with a tight, pre-defined escape route. And in this particular context, anchored VWAPs are my go-to weapon of choice.

So long as price is holding the AVWAP from the prior low - I’m happy being in the trade. As is the case here with INTU. I’ve also added two bars: green for support, red for resistance, to help identify other potential areas of supply/demand when entering the trade.

Down here, we’re right on the AVWAP from the prior lows, hovering just above support. That’s limited downside risk, and solid upside potential. Risk. Reward.

Another way to play these potential bases is to stick a Fibonacci Retracement from the prior low to the former swing high. When price retraces into the golden pocket - as shown on CRM above - wait to see if buyers show up and take it from there.

Honestly, so many tickers look like the examples shown here from VEEV to PLTR - but that’s not to say every software stock is built equally, far from it.

Already we’re starting to see names within the cybersecurity space lead to the upside - take note of PANW below:

Here you can see the exact setup I’m looking for on other software names right now - price retracing down into the golden pocket with the reclaiming of the prior low’s AVWAP providing the signal to add a long position. Take out the prior highs and up she goes. Lovely stuff.

One that’s setting up right now…PLTR

What I need to see here is price recapturing $140 and progressing towards the upper resistance line - see the purple, diagonal line on the chart. A breakout above $150 confirms the move and likely drags the wider software space higher with it.

If Software’s Going, Crypto Ain’t Messing About

Once the X-Wings launch, subtlety tends to disappear pretty quickly.

That’s crypto whenever software starts catching a bid. No shit, they’re correlated.

Which begs the question - if software gets going here, which crypto-adjacent assets do I want to be adding to my watchlist?

First up, HOOD…

If in doubt, zoom out.

What we have here is a stock trading at a really interesting level - the prior highs from February 2025 - which right now, is offering valid support above $65 a share.

Zoom in and things look even more interesting. Golden pocket, check. Earnings AVWAP, check. Prior low AVWAP…pending.

Should price get above $78 over the coming days and weeks, then I’ll likely add more to my existing position. And if it doesn’t? No sweat. I’ve got the AVWAP from the earnings gap as a potential stop, with the 78.6 fib below that. Risk. Reward.

And how’s about COIN…

Just look at the cluster of AVWAPs bunched together down here!

And the golden pocket too? Come on, too good!

Sure, she’s a spicy (and expensive) high beta beast - but the risk/reward is there for those willing to take a shot…

Revenge of the SaaS?

Not every rebellion succeeds. And that’s the key point here.

Just because key support levels are holding doesn’t make any of the stocks detailed in this post a sure thing, far from it. Markets don’t hand out guaranteed wins simply because a chart looks tidy and an AVWAP lines up with a fib level.

But where there’s a tight stop, there’s a favorable opportunity.

That’s the whole game. Defining risk before the trade even begins.

If support fails, I’m out quickly with manageable damage. If it holds and momentum returns, the upside can massively outweigh the downside.

Trail those stops and let’um ride, young Jedi.

Best,

Alex

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In The Lord of the Rings, power flowed through one object: the ring. Whoever held it shaped the fate of Middle-earth.

Markets aren’t quite that dramatic. But there is one chart I keep coming back to when I want to understand what kind of tape we’re dealing with: SPY relative to GLD.

When it trends higher, advances tend to be impulsive - especially above key moving averages. But when it doesn’t, and price rejects off those same levels, what appears to be impulsive can soon turn out to be sinister…

…the market discovering the Ring wasn’t in friendly hands after all.

One Chart To Rule Them All

Here’s what we’re looking at - the black line is SPY relative to GLD on the weekly timeframe dating back to late 2015. The blue line is the 50WEMA and the purple bar is a key pivot which has consistently held as support dating back to 2016.

Let’s start with the purple bar.

V-shaped recoveries from this area have proven to be great buying opportunities (not one of these bottoms annotated on the chart have been revisited btw) but things get really fun when price breaks and holds above the 50WEMA.

What’s happening right now?

Price is staging a dramatic ‘oops’ reversal below the pivot, echoing the adage that from failed moves, come violent moves. In this case, a lock-out, face ripper of a rally that’s seen SPY gain over 14% in one month.

“It is a strange fate that we should suffer so much fear and doubt over so small a thing”

Before we get too giddy, like a hobbit kicking through the shire, it’s important to note that whilst the first part of the bargain has been upheld - SPY/GLD holding above the key pivot - the mission to Mordor remains incomplete at the time of writing.

As the chart above warns, when price rejects the 50WEMA from below and trends lower, corrective moves typically follow. Here’s how this relationship has translated on the weekly chart dating back to 2016…

“The Wise Speak Only Of What They Know”

So which one is it?

Are we going to reject off the 200DEMA and lose our freaking minds or rip straight through it like Aragon’s sword?!

Well, markets rarely roll over on a whim. And for a corrective move or bear market to play out, a few essential ingredients are required.

A sprinkle of volatility. A helping of deteriorating breadth. Widening spreads etc...

But why tell you when I can just show you?

See those red bars on the chart?

They show instances where spreads were widening, vol was climbing and breadth was deteriorating - all pieced together in my primary risk composite indicator. Notice how we flipped from green, to orange to red prior to each of the corrective moves mentioned earlier?

But here’s the real interesting part - especially if you’re bullish. None of those things are present right now. So unless things take a severe turn over the coming days/weeks, don’t be surprised to see SPY/GLD reclaiming the 200DEMA - at which point, thanks to this handy post, you should know what to do.

Best,

Al

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Whenever I think of the movie Drive, three things immediately spring to mind.

1. Ryan Gosling’s scorpion jacket

2. Carey Mulligan

3. That elevator scene

Let’s revisit the latter - just in case you missed it.

Entering a lift, the driver (Ryan Gosling) realises a hitman has followed him and Irene (Carey Mulligan) inside. Pulling Irene behind him to protect her before sharing a quiet, slow motion kiss, the driver then turns towards the attacker, launching a violent assault before stomping his head in, leaving nothing more than a mangled face and bloodied corpse on the floor.

When the doors open, the driver doesn’t step out with Irene. He stands alone, knowing he is separate from the world outside.

Which is precisely how I’ve felt for the last few weeks…

Cashing in on Chaos

As has been the case for the best part of three weeks now, a significant number of traders still - somewhat shockingly - find themselves on the wrong side of the tape.

Fixated on oil and the Middle East, said traders remain sidelined by a market that simply refuses to let them in. Every day they speak of a dip that’s yet to come - and if that fails, they don’t hesitate in turning to the old adage of ‘MaNiPuLaTiOn’ to justify their poor decision making in what has been a hugely profitable couple of weeks.

For those of you that opted to join the paid tier of Al Trades Charts, congratulations.

If you only took one contract per trade in the live chat, my math shows you’ll be up a not-too-shabby $3,714 on closed trades. Not bad for a month’s work.

Risk-On Remains In-Play

Rather than switching between Risk Models 1 and 2 in each post, I decided the most efficient route would be to build a composite of both models on one clean chart.

And what does that chart show at the time of writing? Clean air.

What you’re looking at here is a composite model blending five signals that historically shift when markets transition from healthy trend conditions into fragile environments:

• VIX vs its 50-day average → volatility pressure rising or easing

• Credit spreads (BAMLHY) vs 50-day average → stress in corporate debt

• % of S&P 500 stocks above their 50-day average → internal market participation

• TLT/SPY ratio vs 50-day average → defensive positioning vs growth exposure

• XLP/XLY ratio vs 50-day average → staples outperforming discretionary (risk-off behavior)

When these start flipping either unison or isolation, it typically signals a shift in market tone. To help make it clear what kind of regime we’re in at any given moment, I simply applied a color-coded overlay to the chart:

🟢 Aligned risk-on → dips are usually buyable (present setup)
🟡 Mixed regime → selective exposure only, trade with relative strength
🔴 Aligned risk-off → capital preservation matters more than conviction

As you can see on the chart we are currently in the ‘green zone’ - signaling that dip buying remains the dominant strategy - something that should theoretically continue so long as SPY and QQQ trade in positive gamma.

Should this change, all subs will be notified. But until it does, I’m looking at areas of the market which continue to lead - and those which may just be emerging.

Pick Your Winners

Not all areas of the market trade the same relative to the regime that’s in play. Just because we’re in clean air doesn’t mean something like MSTR is automatically destined for new ATHs, for example. I think this is a common misconception - so it’s worth remembering.

One of the easiest ways to stay aligned with what’s actually working is by tracking relative strength using data.

To help do this, I typically start by comparing sector ETFs relative to the broader index (SPY) on a weekly chart, overlaid with a simple 10/21wma ribbon to help visualize the trend that’s in-play. If that proves too janky, I switch it up to the 21/50wma combination instead. Pretty simple stuff.

Here’s a great example - IGV/SPY.

What’s noticeable here is that despite the market flipping from ‘risk off’ to ‘risk on’ - software still looks like hot trash - trading below a rapidly declining 10/21wma ribbon having flipped prior support into resistance.

Whereas semiconductors, on the other hand…

Upwardly mobile, stretching wayyyy above the inclining 10/21wma ribbon, smashing through prior resistance and flipping it to support. Pure, unadulterated leadership.

So What’s Next?

If you caught the generational run in semis, great work. Subs were alerted a few weeks ago that I was buying INTC which turned out to be an awesome trade. AEHR was another that worked well, climbing from $42 to $90+.

But with semis looking overextended and overbought, my attention is turning to areas of the market that are showing renewed, or existing strength, relative to the wider market.

If we’re staying true to the parameters detailed above, the natural place to start is tech - XLK/SPY - the thing that’s been leading the bull market since its inception in 2022. The only thing that’s concerning me here is the RSI - which is nearing the overbought zone on the weekly chart - something which has typically preceded corrective moves.

Notable tickers in this space include:

GLW

SATL

RIOT

Quantum stocks look pretty similar too - note QTUM/SPY and its healthy relationship with the 21/50wma moving average ribbon, but similarly overbought conditions on the RSI.

Don’t Sleep on Energy

So tech is leading and dips are buyable - no shit, Al!

Ok hear me out. How about a little…energy.

If we’re being objective - the bear minimum as traders - then you’ve got to admit that XLE/SPY looks OK at this level.

Sure, it’s taken a swift beating over the last few weeks as geopolitical tensions have eased, but there’s definitely a bullish setup here so long as price holds above the 21/50wma ribbon and the 61.8 fib retracement level in my view.

Notable setups in this space:

NOG

OKLO

UUUU

What About Crypto?

Despite broader indices hitting new highs, the bounce that’s played out in crypto has been pretty muted, with Bitcoin, Ethereum and Solana way off prior highs - despite threatening to breakout from their respective ranges.

Bitcoin - the crypto market’s MVP - looks OK here. But if I’m being honest, I expected more given the moves we’ve seen across broader risk assets, namely semis and tech. Could we breakout over the coming weeks? Maybe - I certainly hope so.

On the weekly chart, here’s how IBIT/SPY looks. Still below a declining 10/21wma ribbon, despite price reclaiming the shorter term 10wma (orange line).

In my view, this signals a potential bottoming formation - but nothing more at this stage. Should we see a progressive burst higher - likely driven by Bitcoin reclaiming the key $80k level - then I’ll start to get aggressive on names like COIN and MSTR.

Until then, I’m trying to avoid front-running the move too much.

A Predictable Setup

Right now we’ve got semis closing in on 18 straight green days while the S&P 500 prints another all-time high. No shit - it’s a bull market. But just because it’s a bull market in semis doesn’t mean it’s a bull market everywhere.

As this post points out, leadership still matters when picking which trades to enter and which to avoid. It’s a stock pickers market - don’t go picking the wrong ones!

And yet despite this irrefutable truth, there’s a predictable amount of noise on X and Substack as traders hoover up calls on every speculative name going.

To be fair, it’s worked incredibly well this month.

And I won’t pretend otherwise - I’ve played more speculative tickers than usual myself. If there’s money on the table, I’m interested.

But looking ahead, I’m not leaning too heavily into anything right now.

Parts of the market are stretched, and I’d rather stay selective while some of the more overbought areas cool off.

Boring. Maybe.

But just like Ryan Gosling in that elevator scene, when the doors open, you don’t always walk out with everyone else. Sometimes a little space to think, gather your thoughts and compose yourself, is the right move to make.

Best,

Al

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There’s a scene in American History X that everyone remembers. The curb stomp.

It comes after Derek’s car is broken into by three black men late at night. Fueled by rage and his deep involvement in a local neo-Nazi gang, he confronts them outside his house. He shoots two of them as they try to flee, then drags the third to the pavement.

What happens next is truly violent.

Derek calmly orders the man to bite down on the curb, pauses long enough for the audience to understand what’s about to happen, and then stomps on his head. The scene is filmed in stark black-and-white, heightening a sense of moral coldness and inevitability.

The reason the scene sticks isn’t just the violence. It’s the finality of it. One moment where resistance disappears and the outcome becomes obvious to almost everyone watching.

And over the last two weeks, markets delivered their own version of that very moment.

Here’s SPY.

And the VIX? Stomped. Blood on the streets.

Here’s what that moment actually looked like under the hood:

• SPY −10% correction → +11.2% in 11 sessions

• VIX: 45 days above 50dma → sub-18 in two weeks

• The third largest two-week vol compression on record

Stomp, Stomp, Stomp

We all know what commentators said the catalyst was.

If price action was Derek dragging the thief across the pavement, the de-escalation in the Middle East was the curb the bears were forced to bite down on.

That might sound overly neat. Maybe even a little narrative-heavy.

But let’s be honest - that’s exactly what many bears were doing in the weeks leading up to it. Taking a single storyline - oil up = stocks down - and running with it as if the rest of the tape didn’t exist.

And it wasn’t just wrong.

It kept them wrong long enough to miss the entire move that followed.

Because in the run-up to the de-escalation, the real warning signs weren’t only coming from oil. They were coming from the market’s internal risk gauges - the stuff that quietly flips long before positioning does.

The exact metrics I’ve been pounding the table on for weeks…

• The VIX was holding above its 50-day moving average

• TLT/SPY was trading above its 50-day moving average

• XLP/XLY had pushed above a rising 50-day moving average

Even before a bomb was dropped on Iran, these classic risk-off signals were firing like an IED - clear enough for anyone willing to look.

And when those signals started to unwind, the outcome shouldn’t have surprised anyone paying attention.

Being Wrong ≠ Staying Wrong

I’m not going to sit here and tell you that I played the move perfectly.

But what I will say is that when my risk models gave the all clear - something which was communicated the day it occurred - I dropped the bearish thesis immediately, because when the data changes, the job is to change with it.

That’s just my approach.

I don’t build risk models for fun. I build them to help visualize the environment we’re trading in at any given moment - and more importantly, to stop myself getting anchored to a narrative once the tape has already moved on.

And that’s the difference.

Because while some traders were still leaning on the oil up = stocks down storyline, the market had already started switching regimes under the surface.

Risk signals were unwinding. Volatility was compressing. Leadership was stabilizing.

If you stayed short because the headlines still sounded bearish, you weren’t trading the market anymore - you were trading the story. And as anyone holding puts over the last fortnight will tell you, stories don’t pay. Only price does that.

What Happens Now?

Whilst bearish takes relating to inflation, negotiations or a single weak bond auction will likely crop up like mines in the Strait over the coming weeks, I’m happy following the same system that helped me tighten up in March and push down hard in April.

Should risk models flip to the downside, then you’ll be first to know - and most of the below will be invalidated in an instant. But until that happens, I’m comfortable buying some long dated positions in some of the market’s more beaten-up - and if we’re being honest, mispriced - names here.

Software

Few sectors have been hit as hard as software over the last six months. The sell-off hasn’t been selective, dragging revenue machines like MSFT down alongside weaker, story-driven names like ASAN - which is precisely where the opportunity sits.

When markets de-risk in a hurry they rarely separate quality from speculation, which means the same move that punished fragile balance sheets also reset entry points in the companies most likely to lead when conditions stabilise.

Names I like in this space: VEEV, MSFT, CRWD, INTU, PAYX

Crypto

Like software, the crypto ecosystem found itself in the grips of a brutal winter sale during Q4 2025 and Q1 2026. If risk-sentiment returns to the space - likely lead by Bitcoin resolving above $80k - then there are a good number of names to keep an eye on.

There’s still work to do, but if COIN breaks $225 and MSTR recaptures $150, it likely means game-on as far as crypto is concerned. Keep an eye on SOL and ETH too.

Semis

TSMC reported earnings before today’s open, once again smashing estimates and raising guidance. Sure, we’re early into earnings season - but if this sets the tone for what’s to follow from the likes of AMD and ALAB, there’s reason to remain optimistic when it comes to semis.

Data Centers

Some of my favorite names right now exist in the data center space - areas which held up surprisingly well during a turbulent Q1. Names to watch out for here include RIOT, CIFR, IREN and NBIS - just a few that are staging breakouts at the time of writing. Well worth a look in my opinion.

Financials

What if private credit fears were a nothing burger and financials - I’m talking big banks here - continue to show solid earnings growth and forward guidance? What if credit spreads remain tight and rates fade from the highs - helping the likes of JPM and C to maintain healthy balance sheets?

It’s a move I’ve been keeping an eye on for some time and it probably won’t happen overnight, but with long-dated calls locked and loaded, I’m not betting against a KBE comeback here.

Homebuilders

Homebuilders love low interest rates given the obvious correlation them and mortgages. Should rates calm a little - which could occur in lockstep with fading growth fears as a result of Middle Eastern de-escalation - then I think the likes of LGIH and PHM will resolve higher from key support levels.

FOMO, Here?

When stocks rip higher like they have over the last two weeks, it’s easy to look at charts up 10–20% - or even 50% (Ascent Solar Technologies, anyone?) - and feel like you’ve missed the move.

I know the feeling well. But the reality is that even in strong impulsive advances, pullbacks are part of the process. And as long as those setbacks happen while the under-the-hood metrics - and most importantly, my risk models - remain in the clear, I’ll treat them as opportunities to add as opposed to reasons to step aside.

Because that’s the thing about moves like this - they don’t just change price, they change positioning.

And in American History X, the curb-stomp scene isn’t the end of Derek’s story. He’s the one who ends up paying for it, and he’s the one who eventually walks out of prison seeing the world differently.

Markets have a way of doing the same thing.

Sharp regime shifts punish the narratives that overstayed their welcome. And if the last two weeks have done anything, they’ve forced a rethink from anyone still anchored to the idea the bull market is over.

Best,

Alex

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I’m not saying today’s two winners were obvious…

…but they were sitting right there in the paid subscriber chat.

And if you’d been in the room - you’d have seen them too.

Instead, some of you are still standing outside the glass office door watching the party through the blinds while everyone else is already throwing paper in the air and high-fiving over charts that actually worked.

Two names.
Two clean moves.
Bought and sold right there in the chat.

Subscribers saw the setups.
Subscribers saw the levels.
Subscribers got the plan.

Everyone else got… vibes.

So if you’d quite like to be in the room next time instead of reading about it afterwards:

👉 Come join us inside.

No chest-thumping required. (Optional, but encouraged.)

Alex

As a quick follow-up to this morning’s newsletter, I wanted to reiterate a point that probably didn’t come across too well.

Whilst risk models remain in the ‘clean air zone’ - so that’s spreads behaving themselves, TLT fading relative to SPY, XLY catching a big against XLP, you get the picture - there’s no shame in swinging the bat at some of the tape’s more speculative names.

The charts I posted this morning, whilst offering solid entries with tight stops, are just common plays - not the type of charts that’ll send blood to your nether regions but solid picks for the port regardless.

But they aren’t the only charts worth paying attention to.

If you’ve got the stones for it, there are a handful of more speculative setups starting to look interesting just beneath the surface - the kind that tend to move faster and further - and they’re very much in play so long as the tape continues to behave itself.

LGIH

Yes I see the bear flag. But I also see price hovering at critical resistance and refusing to die - despite the apparent end of the world looming large. If rates reverse their aggressive ascent, this thing moves. I’m in December calls on this one.

COIN

I don’t particularly like this one below the purple pivot - but as a speculative trade, I’m comfortable throwing a bit of change at it so long as the green zone (golden pocket) holds as support.

CIFR

Another speculative crypto play. Price coiling for the best part of six months with a breakout pending. Upwardly mobile 200dma acting as support is a good sign, but desperately needs BTC to break higher.

ASTI

Another one sitting in the golden pocket. ASTI is a nice solar play that’s quietly carved out a higher low on the weekly timeframe. So long as it sticks above the 200dma, I’m happy sitting in commons.

NBIS

NBIS breaking out and climbing higher intraday. Last week’s perky volume was the tell. Missed this one personally, but the chart looks good if you’re looking to sell at higher prices.

APH

Another breakout play with perky volume during last week’s session. Would like to see the 10/21ma climb back above the 50dma - but unsure if this happens before or after new highs.

MAGS

So long as MAGS sticks above the green line (AVWAP from April 25 lows) then markets remain ‘risk-on’ in my view.

ARKK

ARKK has a pulse above the two purple bars (key pivots). Lots of work to do below a number of key moving averages - but worth keeping on the radar.

CRWV

CRWV breaking out on record volume. Either the most obvious long going - especially above the 200dma - or the biggest trap I’ve ever seen. Time will tell.

Best,

Alex

Disclaimer: As always, these are simply the setups I’m watching and trading myself — not recommendations. Make the trade your own, manage your risk appropriately, and do your own research.

If you’ve seen Uncut Gems, you’ll remember the feeling more than the plot.

The pace is frenetic. Nothing is fully under control and yet throughout, the bets keep getting bigger. It’s an incredibly stressful (but fun) watch.

That’s roughly what this market feels like right now.

Like traders in 2026, Howard Ratner doesn’t operate in a stable environment. He operates in momentum bursts, emotional swings, and short windows of opportunity.

One minute he’s buried. The next he’s looking like a genius.

Then everything flips again.

Sound familiar?

A Quick Recap

After predicting last week’s price action would be determined by the Emperor’s thumb, hostilities, oil and international waterways find themselves back in vogue this week following the breakdown in negotiations between the US and Iran.

Which leaves markets in an interesting spot.

On the surface, things don’t look great.

WTI is up 13% from last week’s lows, while the VIX - having briefly dipped below 18 - is now pushing back above 21 at the time of writing.

And yet, despite a backdrop that should be weighing on risk assets, markets are holding up… ok.

Why is this happening? For clues - refer to the risk models below:

As was the case during last week’s session, Risk Model 1 and Risk Model 2 are currently sitting in the clean air zone, sailing on the tailwinds that are:

• Tightening credit spreads

• XLY catching a bid relative to XLP

• The VIX dropping below its 50dma

• TLT dropping relative to SPY

So long as this sticks, dips remain buyable.

But if Uncut Gems taught us anything, it’s that situations that look under control can unravel very quickly.

One headline.
One Truth Social post.
One volatility spike.

And suddenly we’re testing those anchored VWAPs from the 2026 lows.

Where’s My Money?

For some people, trading in this kind of environment is a dream.

Go take a look at and the guy’s absolutely killing it with day trades right now.

But that isn’t me.

This is Uncut Gems territory - fast decisions, fast reversals, and positions that can swing wildly the moment Bagher Ghalibaf or President Trump fat-fingers a tweet.

That style works for some people. I’m looking for something steadier.

If I’m buying stocks here (which I am), I want names that have shown consistent strength over the last few weeks - the kind that are less likely to hand back their gains on the next headline shock.

In short, I want volume. I want uptrends. I want stocks holding above their weekly 10/21wma moving cloud. I want trends supported by the macro. I want moving average alignment. I want bull flags. I want flows. I want to play that relative strength.

Let’s dig in to some charts…

FBRX

Biotech. One of the biggest areas of relative strength this year. Enter FBRX with record volume and flows, breaking out of a flag and targeting new highs.

ET

Flagging high and tight ET is on the watchlist here. Moving averages bunching a little suggests a big move is coming - and as long as its above the 50dma, I’m leaning long.

AMZN

Whilst the rest of the market kept falling, AMZN moved sideways throughout Feb-March before bursting higher last week. One of the stronger looking MAGS constituents.

SEI

Held where it needed to after months of consolidation. 200dma remains upwardly mobile. Looking at the prior high of $70.19 before staging a potential breakout play.

MEOH

Bullish MA alignment. Insane volume. An ongoing macro catalyst. MEOH is sitting top of the watchlist right now, and with good reason.

NFLX

Huge volume at the lows. Moving averages moving back into alignment. A breakout the multi-week highs. NFLX isn’t too shabby here - especially given the wider software space. Just needs the 200dma for me to be a buyer.

So I’m sticking with strength and following trends.

If a stock can keep its footing while the tape feels like Howard Ratner - loud, fast, and one headline from chaos - chances are it’s not done moving higher when clearer skies return.

The names that refuse to break when oil spikes, volatility lifts, and headlines start flying are usually telling you something. They’re showing where institutions are willing to stay involved even when conditions aren’t ideal.

And when the noise fades, spreads tighten again, and the VIX rolls back over, those same stocks have a habit of leading. So rather than chasing every swing in a tape that can change character overnight, I’m leaning into resilience.

You do you and as always, have a great week.

Best,

Alex

As always, this isn’t financial advice. I’m sharing what I’m seeing and how I’m positioning - not what you should do with your own capital. Do your own research and make the trade your own.

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Taking inspiration from my friend - someone you should all subscribe to - I’m going to trial sharing live trade updates via the Chat function in Substack, as well as the usual email you should have all been receiving over the last week.

If you’re signed up for the paid tier and are thus eligible for the live trades feature, make sure your notifications are turned on so as not to miss any updates.

A quick recap of trades shared so far:

INTC + 20%

JPM +50%

NOG + 10% (closed this morning)

Just one contract on each of these trades would have covered your subscription fee for an entire year and some - so please consider signing up to support my work.

Best,

Alex

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You must be mad to buy oil stocks when the news is nothing but non-stop bullish.

But here I am, buying calls in an energy company…

Read more

I'm on the road away from my desk so apologize for not closing it sooner. JPM was last night's trade - I've now closed this one out +50% for net $1,450 in overnight gains.

I'll be back at my desk this evening and will look to provide a free update for everyone on any charts that take my fancy before the close.

Trades this week:

INTC +20%

JPM +50%

If you only bought one contract on either of these names, you would have covered the fee for the paid tier for the whole year (and some) in less than a week - so please consider signing up to avoid missing the next one!

A quick note this morning.

You should all be aware by now that I use two Risk Models when it comes to evaluating market conditions.

You’ll also be aware that dating back to February, both Risk Models have been signaling ‘risk off’ - sitting deep in what I call the ‘Red Zone’.

Here’s a quick refresher on what triggers both Risk Model 1 and Risk Model 2:

Risk Model 1 enters the red zone when the following conditions are met simultaneously: the VIX trades above its 50dma, the % of S&P 500 stocks trading above the 50dma falls below the 50dma and Credit Spreads (BAMLH0A0HYM2) trades above its 50dma.

Risk Model 2 enters the red zone when the following conditions are met simultaneously: the VIX trades above its 50dma, TLT/SPY trades above its 50dma and XLP/XLY trades above its 50dma.

Here’s how they’re looking as of this morning:

Risk Model 1

Risk Model 2

Both risk models appear to be trading in the ‘clean air zone’ - signaling the potential return of ‘risk on’ sentiment driven by the easing of tensions between the US, Israel and Iran.

These models have been incredibly effective over the last few years - and I wouldn’t bet against them whenever they enter the red zone, just as I wouldn’t bet against them whenever they enter clean air.

Will we see follow through during today’s session and into next week?

Nobody knows for sure.

But using these models as the basis for understanding trading conditions is vital if you’re in the business of preserving capital during drawdowns and making money during periods of relative calm.

If you’re interested in adding them to your charts on Trading View, just let me know in the comments and I’ll share the Pine Editor codes/indicators with you.

Best,

Alex