Luca - Cryptic Trades
Markets Researcher at Cryptic Trades
With the Fed meeting behind it, the Nasdaq 100 is entering its next phase of expansion; the recent pullback was a re-accumulation opportunity, not a time to raise cash. Stocks are filling gaps and moving back into attractive areas, so cash set aside before the drop should now be deployed into the dislocation ahead of the next leg higher. x.com
The Nasdaq-100 has gone from looking like it was breaking down a month ago to breaking out, and the year's next big run may be approaching in an easy-dollar environment. The market moves in waves, usually with 1-2 big runs a year, and the last one came in April. x.com
The Nasdaq 100's options structure remains bullish, with QQQ in positive gamma and gamma extending up toward 760. The 740-750 zone, traded repeatedly for months, is where positions are being digested, so a breakout may take time; as long as 740 holds, this is high-level consolidation. Volatility sellers dominate, keeping the VIX pinned near 15, and if spikes toward 16-20 keep getting sold, the backdrop for risk assets is unchanged; the VIX could reach 13 in October. x.com
QQQ's remaining earnings, macro and election hurdles set up one more dip to punish late chasers. The index looks good and is pricing in some good news today, but Amazon, Intel and SanDisk earnings plus PCE and GDP arrive tomorrow, followed by AMD earnings and elections Tuesday. Expect one more, probably modest, dip Wednesday or Thursday next week before November's upward seasonality takes effect. x.com
QQQ's resilience is the bullish signal: it has held the proper levels through every headline this year that would have tanked a weaker market. Even when CPI came in hot and rate-hike odds hit 90%, stocks were green across the board, showing that what is priced in matters more than the news. QQQ continues to hold above its weekly support zone, avoiding a full risk-off scenario. x.com x.com
Nasdaq-100 stocks and NVIDIA look like a dip to buy because a 1%-plus gap down over a tweet doesn't add up given how resilient the market has been to data. Hotter-than-expected payrolls, slightly warm PPI and an 80% chance of a rate hike did not bring the market down, though yields did on Thursday, and stocks rose on in-line CPI. This is an initial read ahead of Wednesday's FOMC decision. x.com
Nasdaq-100 downside could accelerate if QQQ falls below $712: dealer positioning at $700 and $690 would fuel the move unless the index reclaims its moving averages and breaks upward. July and September FOMC lows remain untouched, something that has not persisted across two consecutive meetings; taking out at least one in the next week would not be surprising. x.com
The Nasdaq-100 is more likely to avoid a selloff after tomorrow's Fed decision than markets expect. A 25 bp hike is priced in; what isn't is whether more follow. A hike with a neutral tone, or no hike with a hawkish tone, would bring a choppy rally into the weekend; no hike with a neutral or dovish tone would bring a face-ripping rally; only a hike with a hawkish tone means a selloff. The lean is toward no hike, with the caveat that this could be very wrong. x.com
Nasdaq should head higher through earnings season because big tech is sure to increase capex. @JonahLupton notes possible downside support around $684, the VWAP from the March lows and the 100-day average, with $652 next if that fails. x.com
The Nasdaq-100 could be forming a double top as the US 10-year yield makes a statement, a reason to build cash while equities are up. x.com
The Nasdaq closed at an all-time high, showing that selling after the war began was a mistake. Stocks keep rising throughout Trump's term, and in the end only those who hold assets win. x.com
