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Crypto And FED News | What Does That Mean For The Stock Market And Day Traders?

Duration: 9:23 1719 transcript words EN summary

Video summary

The main focus of this financial update is the impending Federal Reserve decision expected tomorrow, which carries an 80% or higher probability of raising interest rates by 25 basis points. While the failure of the Crypto Clarity Act in the Senate has caused a notable setback for cryptocurrency stocks and related equities, the speaker argues that this specific event is unlikely to cause significant sleepless nights for major Wall Street players ahead of the Fed meeting. The broader market sentiment will largely depend on how investors react to the rate hike news, with the expectation that any substantial price discovery or volatility will likely occur in the afternoon session after the Federal Reserve's press conference concludes, rather than during the initial hours of trading. A critical technical level identified for day traders is the 702.70 mark on the QQQ ETF, which has been tested and defended twice recently, coinciding with a significant low from August 24th. The speaker emphasizes that this specific price point represents a definitive "line in the sand" where market direction will be determined; if this level holds, it could pave the way for a rally, but if it is breached, the market faces a substantial downside risk extending down to the 697 and then 682 levels. This technical setup mirrors patterns seen historically around June 9th, where the market lost about 60 points after failing to hold key moving averages, suggesting that active traders must be prepared for a potential "do or die" scenario tomorrow rather than expecting a stagnant or lethargic trading session. Beyond the broader index levels, individual semiconductor and technology stocks are highlighted as key indicators of market health, particularly regarding their relationship with the 50-day moving average. Companies like SanDisk and Micron have recently defended this crucial support line, but a failure to hold these averages could trigger significant sell-offs, with SanDisk potentially dropping 100 to 150 points if it loses its support. Conversely, stocks like Dell and Qualcomm are noted for their strong performance and potential upside if the market rallies following positive news, though traders are advised to exercise caution and avoid overreacting to early morning volatility until the full picture emerges after the Fed announcement. Ultimately, the video concludes by urging traders to stay patient, avoid making rash decisions during the quiet pre-Fed hours, and focus on executing strategies based on these well-defined technical levels once the market's true direction becomes clear.

Read the full video transcript

Here's Dan Shapiro to help you find your edge, master your process, and own your future. >> Hey guys, good evening everybody. Welcome to another edition of uh the actual trade nightly wrap-up show. Hope everybody is uh doing well. Uh guys, take a moment out. Uh click that like button, support the channel. Hopefully I will point you continue to point you uh in the right direction. Um I I think this video could be summed up in less than 5 minutes. Um I think going into tomorrow's session, there is a definitive line in the sand of both for the bulls and the bears for the foreseeable future. Okay, I I really believe that. Uh first, the big story of the day, if you are a crypto fan, uh the Crypto Clarity Act officially uh fails to pass the Senate in a major setback for cryptocurrencies. For all you guys who are in crypto, you kind of see uh the air being coming out of crypto stocks all across the board. Um does that mean anything for the broader market? Look, I I I tried to tie in speculation money with uh alternative assets, but in this case, I I don't think a lot of people are going to be uh losing a lot of sleep, a lot of you know, major uh hitters on Wall Street going into tomorrow because tomorrow is Fed day, right? A Fed day. Uh now there is an 80-plus chance 80% plus chance uh that the Fed might raise rates tomorrow. Now, what does that mean? Well, I don't know what it means for price action. We don't know exactly how uh the market's going to react off that price action, but I can clearly tell you what I am watching tomorrow. And this level here is not room uh for debate. You could be the biggest bull in the world, you could be the bearish bear in the world. Shout out to Chivani, great stuff. But there's a level coming up tomorrow that got tested yesterday, right? If you are kind of hiding under a rock, you kind of see that the last 2 days or so, you're seeing some pretty significant weakness. Yes, you'll have your outlier moves in Meta and Microsoft and in Google so forth and so on, but what's happening the next day? The next day they get sold and they sell get sold very, very aggressively. If you combine that with a couple of days ago, this whole AI potential softening and scaling back over the weekend, what you heard and all the memory stocks coming back. Obviously, memory plays out with a lot of weight on the Nasdaq 100. We are setting up for a pretty big level in the line of the sand. So, before we talk about tonight's level that we want to definitely pay attention to, I want to go back to June the 9th, okay? You see that you see this candle here, this whole big candle here that had a hammer and ultimately had the market running back, right? The low here was roughly around the 690 area, 686, 690 area. And the market did kind of a song and dance for the next couple of months, losing the 50-day, reclaiming the 50-day, ultimately got back to this level here and eventually lost it. And what happened was, right? The market lost within a 2-month range, the market lost the Qs lost about 60 points um from top to bottom losing the 50-day moving average in about five sessions. Now, why is that important? Well, kind of setting up here pretty much the same way. We're kind of going this under the 50, reclaiming the 50, under the 50, reclaiming the 50. So, we're kind of going this teeter-totter area. Now, what was yesterday's low, right? Yesterday's low on the QQQ's were 70274. Now, if you have an untrained eye and you turn around and say, "Well, what's the big deal? Why is that so significant? Because that was also the low, right? You can see that was also the low on August the 24th. Everybody see it, right? The August 24 low is 70270. Yesterday's low was 70270, right? Again, technical analysis is not random. Either we are really, really good guessers or these numbers actually matter. Now, again, if you're a long-term investor, if you are something, you know, 10 years down the road, this video with our platform has nothing to do with you. But, if you are an active trader this 70270. Write that down, guys. I don't think there's going to be uh you know, a a debate about this, right? There's not enough of water cooler talk that can kind of negate the obvious. Uh if the market starts to fail, right? If the Qs start to fail and start giving back that 70270 level, well, you can see, right? The first uh the first move down it is not that dramatic, right? It's just not. Because, again, stocks trade from support to support and supply to supply. As you can see, if we start losing the 70270, we start getting down to the 698, 697 level. But, the problem is the longer we continue to build below these supply zones, right? In the next several days after any close below the 697 level, and again, guys, look how much room. Here's your next supply zone going down to 682. Again, if you are an investor, it's probably not going to mean anything to you. But, if you are a trader, these levels are going to matter. So, uh do or die, right? Do or die tomorrow. Uh you are probably not going to get a reaction until after the Q&A session. Um is it possible we have a lethargic drawn down day that everybody's just sitting there and the market's playing ping-pong and your stock is not moving? And it's going to probably churn your account in the first 30 minutes? Probably. So, knowing this, get your hand off the keyboard, right? Unless you see something very, very dynamic tomorrow in the morning with a lot of option flow in the same direction, get your hand off the keyboard tomorrow cuz probably you're going to see the price discovery, right? Price discovery area in the afternoon. Is it possible the market loves this 25 potential base point rise and the market rallies? Sure, of course. Again, we always talk about guys, there's no such thing as definitive. We just kind of we're prepared for levels. If those levels get breached, well, you're going to act on those levels. So, is it possible the market likes this news of 25 base is point hike? Sure. But in case it doesn't, folks, watch that 70270 level. And if it does fail, again, there's a lot of names that put in inside days today from yesterday's pre-aggressive selling, especially the memory names that potentially could get hit. Let's talk about some setups here. SanDisk, right? SanDisk, the darling. SanDisk, the darling. Guys, SanDisk is back-to-back days defended the 50-day moving average. Everybody see that? Back-to-back days, it held the 50-day moving average back-to-back days. If the Nasdaq gets pulled and SanDisk loses the 50-day moving average, folks, there's like 100 150 points to the downside. The same way we had that Remember we had that really big pivot above the 50-day moving average and put up 150 point move? Well, again, this is the opposite. It keeps on defending. Keeps on defending. Keeps on defending. How many times can it defend? Look at Micron, right? Look at Micron, the same thing. Micron today closed at the 50-day moving average, right? Now, what happens if Micron loses the 50-day? Again, the same way as Micron and I go I know I was in the trade, right? When it reclaimed the 970 level and had a massive massive move. Listen, this this thing put up a 75 point move in 24 hours. Again, what do you think is going to happen if it loses the 50-day moving average, right? So, again, you got to be prepared. Being prepared is absolutely everything. In case the market rallies, where's the market? Where's the strong Where is the strong possibilities? Dell continues to look just absolutely amazing. Uh, only only thing today I got rejected off the Bollinger Band. Hey, you never know, if we get a big big rally tomorrow, watch this thing above today's channel. Um, look at Qualcomm, beautiful move. Beautiful beautiful move today out of a pretty long distribution channel. If the market is good tomorrow and the and the news and the Fed uh, and they like the news and this thing starts attacking today's channel uh, and starts confirming that tomorrow this thing could wait make up as well. Um, you know, you're getting some really good moves. You're definitely getting some moves on both sides of the ledger, but going into tomorrow morning going into tomorrow afternoon guys, I I can't reiterate the point the importance of 70270. Got defended twice. You have a lot of correlation there going back to the August 9 highs and you know, it's either two things going to happen. The bulls are either going to hold that level, okay, and we're going to rally back or if we violate that level again, there's a lot of room to the downside. So, hopefully guys, uh, again, tomorrow during the day, don't go crazy. You okay? Don't go crazy. People are going to be positioning uh, for the Fed. People are going to be doing absolutely nothing ahead of the Fed. Uh, you're going to see a lot of stagnant action for the first couple of hours. If you get something, God bless, but the natural movement is probably going to be uh, after the Q&A session of the Fed. Guys, have a great night everybody. God bless. Let's see what happens tomorrow, right? Let's see what happens. We know our levels. We're waiting patiently. We have the setups in front of me. Now we just have to see what exactly the market does. Guys, God bless everybody. Have a great night. I'll see you on the field tomorrow.