Yellow Momentum (Worsening), Red on RussellThey'll blame the AI trade when this goes... it's really concerns about the financial plumbing...
Good morning, I must say that I love the media… They don’t really understand much these days. The CNBC headline this morning says: “Dow futures fall 300 points as AI trade cools.” The Dow Jones Industrial Average consists of 30 stocks… The top name is NVIDIA (NVDA) – the biggest AI name… it’s down 2% this morning. But go down the rest of the list, and the other stocks that are down more than a point… UnitedHealth Group, Caterpillar, IBM, American Express, 3M, Boeing, and JPMorgan. That’s not really just AI. That’s the economy… and it’s a reflection of weakness… That’s also a sign of ongoing plumbing issues in the financial system… With markets under pressure, I’ve said it’s important to track and trade five stocks a week that are built around heavy momentum. When the plumbing of the financial system breaks or panics, those stocks pressing toward all-time highs can show cracks. They’re all there - NVDA, AMZN, JPM, CAT… Plus ARKK (which is getting hit hard again this morning). If their 8-day EMA falls under their 20-day or 50-day EMA, they become short candidates. If they rebound on those levels, they become long trades. You can do this with the 3-minute, 15-minute, or one-day charts… That will be the subject of my conversation this morning at TheoTrade – and if you miss it, don’t worry. It is recorded. Just click the link. Now to the real meat of the conversation for today’s trading session…... Continue reading this post for free in the Substack app
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