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For The 50th Time, Learn This Trading Indicator!! | PS60 Process

Duration: 8:42 1720 transcript words EN summary

Video summary

The video begins with an analysis of the recent market dynamics surrounding the Nasdaq 100 and its heavy reliance on the semiconductor sector, specifically the SMH index. The speaker emphasizes that control over the 50-day moving average is a critical determinant for short-term market direction, particularly leading up to Nvidia's earnings report. Following a significant aggressive pivot off last week's lows, the Nasdaq lost its position above this key moving average very quickly within the first hour of trading. This loss of momentum was driven heavily by the semiconductor stocks, which faced sharp declines despite the upcoming positive earnings news from Nvidia. The speaker argues that while bulls have historically found ways to recover in similar situations, the current breach of the 50-day line serves as a major warning sign that could dictate lower prices for the foreseeable future unless significant buying pressure returns. A central theme of the discussion is the specific technical levels that traders must monitor to gauge potential downside risks, with particular focus on the SMH and QQQ indices. The speaker highlights that if the SMH closes below the 100-day support level around 540-541, it could trigger a cascade effect leading to a test of the July lows near 729 or even lower levels correlating with the 150-day support at 513. Similarly, for the QQQ index, losing the 703 level on the close opens up further downside space toward 696 and 692, while a breach of 692 suggests an aggressive violent cycle could commence. The analysis points out that the semiconductor group is currently showing weakness, with stocks like Micron already having lost their 50-day moving average and risking a loss of their 65-day EMA, which would expose them to significant further declines. The transcript also explores potential silver linings within the "Magnificent Seven" mega-cap stocks, noting that while some like Google and Amazon showed resilience or call buying, they too faced rejections at key moving averages such as the 50-day and 10-day lines. The speaker uses Tesla as a prime example of how technical levels dictate trading strategy, stating that a return above the 50-day moving average would make it a buy, whereas a loss of the 5-day line would warrant selling for short-term traders. He advises active traders to be cautious given the holiday season and Labor Day weekend, suggesting that the true market nature might not be fully revealed until after these periods. Ultimately, the conclusion is that as long as the Nasdaq 100 remains below its 50-day moving average, the probability of lower prices increases, making it imperative for bulls to reclaim major levels and negate bad news before any significant upward move can occur.

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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 Axe the Trade.com nightly wrap-up show. Hope everybody is doing well. Guys, take a moment out to support the channel. Only takes a second. Click that like button. Uh hopefully again, I will continue to do my best to point you uh in the right direction. It'll be a little bit of a abbreviated update. I got to some things uh last minute uh to to take care of. I just kind of wanted to share my thoughts with you guys going into tomorrow's session. If you guys remember on the weekend update, we closed right on the 50-day moving average. It was in last night's video. Uh all I talked about was again, I don't want to be overly dramatic, but whoever has control of the 50-day moving average was probably going to dictate the control for at least pretty much the short-term future uh going into at least Nvidia's earnings on uh Wednesday after the close. Uh right from the word go, again, we had a pretty aggressive pivot uh off last week's lows of 708.50s. Uh and Qs lost it, right? Q- Qs lost it very, very aggressively. The first move in the first half hour, 40 minutes, Qs went down like 60 uh excuse me, 6 to 7 dollars uh very, very aggressively. Now, why is that important? Well, the majority of weight on the Nasdaq 100 is, you know, implemented with the SMHs, right? The semiconductors uh control a lot of the weight. And the semiconductors got slammed again. Again, despite uh Nvidia coming out earnings in a couple of days. And is it possible uh they can uh you know, save uh fight you know, save the semis, save the Nasdaq as a whole? Sure, absolutely. Again, we've been we've been seeing a lot of stick saves for the bulls uh in the last couple years. But this is kind of important. This is kind of what we're going to segue into a second ago and in a second, uh this is what happens when you lose the 50-day moving average. So, the SMHs has a 50-day moving average on August the 17th and we've gone basically from 600 all the way down to 540, right? This is why it's important to understand the 50-day dynamics of which way the wind is blowing. And now we are in intro way guys in intro way guys right down this level of 540 this 540 541 level is going to be very very important for the SMH is going forward. That is the 100-day support. If it loses the 100-day support especially on the close, then you see this whole patch, right? This whole area pocket that we could go all the way back down to the 729 lows of 503 and this is kind of what's correlating to 513 which is the 150-day support. I think I don't think you're going to get a massive move one way or another until Nvidia comes out with earnings, but this is at least this is at least a barometer that you're aware of. Again, just write this down. SMH is any close below 541 540 and you got you have at least 20 25 points to the downside for potential test of the July lows. Now, why is that important? Again, why are we segueing on the SMH is and harping about the importance of that 50-day close? Well, the Qs first closed now below the 50-day moving average since since right here, right? Since right here which was July the 15th. Again, July the 15th first close we went from 724 all the way down to 660 in a matter of 2 weeks. The Qs stopped right on the Qs stopped right on the 65 EMA. I'm even going to give you the prices on the Qs. If the Qs lose the 703 level on the close, right? Lose 703 on the close, then you got room to 696 692. And obviously, if there is going to be a very exaggerated drop if in this again, we're just kind of kind of putting everybody in the right frame of mind. If there is going to be a big big drop in the SMH is it'll probably going to be a big drop in the Nasdaq. Again, considering the amount of weight a lot of these stocks have, so any close, and this is kind of going putting a little bit of cart in front of the horse, but any close below 692, 696, you can see how much room you have to the downside. So, the bulls need to kind of get back, man, right? The bulls need to kind of get back, but when you see the price action, especially in the semiconductor group, it's going to be very, very tough for bids not to get hit. The the only solace you have here is the argument, well, nobody's nobody's here, guys, right? Nobody's here. People are on vacation. We talked about the last couple of weeks of going into Labor Day. My son finally started first day of classes today. I'm sure your kids are either starting or starting in a couple of weeks. So, this is kind of like the last vacation last hurrah for people for the last moments of summer. So, again, I don't think we're going to get the true nature of the market for potential fourth quarter move one way or another until after the Labor Day, but you know, if you are an active trader, this is a very important to understand now. So, you have six, you know, 702, 703 on the close on the Qs. That is going to start a very aggressive violent cycle. If you are looking for some you know, silver linings, yeah, I mean, some of the mega cap mega cap Magnificent Seven stocks that actually did well today. Google, if the market could somehow rally, you know, got rejected off the 50-day. If Google could get back above the 50-day moving average, sure, this thing looks great, right? Amazon had some pretty good call buying today, got rejected off the 10-day. Sure, if Amazon could get back above the 10-day, I'll be interested as well, right? Sure, to the you know, to the upside as well. Tesla got rejected Friday off the 50-day moving average and came all the way back all the way back to retest the 5-day. Again, above the 50-day moving average and they're still coming in with romantic bets of the 360 370 short-term expiration. Sure, if this thing gets back above the 50-day moving average, of course I'm a buyer, 100%. But, there is a flip side, right? What happens tomorrow if Tesla loses the 5-day moving average? Again, if you've been watching this broadcast for years and years and years, you know I'm in love with the range. I'm not in love with the stock. I couldn't care less if Tesla goes up or down. So, if Tesla could get back above the 50-day moving average, I'm a buyer. If Tesla could lose the 5-day moving average, I am a seller at least for short-term uh to the downside. Uh the best bets are probably going to be to the downside on um semiconductors, right? Again, I'm I'm not going to go through the whole group, but here's a couple of names that look really really good, and then I have to run, right? You got a Vago, right? You got a Vago still suffering from uh the Google partnership from uh Marvell. Guys, look how close this thing. This thing This thing loses last week's lows, this Vago's going to get hit, right? Look at this thing. This thing is Tomorrow will be day five in this whole range. It's a week worth of range. This thing loses last week's lows, it's going to get hit. Look at Micron, right? Look at Micron. Micron lost the 50-day moving average. This is the first close below it. It held up It held up on the 65-day EMA. Now, what happens if the 65-day EMA gets lost tomorrow, right? This thing loses the 65 EMA. There's like 50-60 points of measure potential for the next downside move. So, if you're going to be looking at the direction of weakness, continuation of weakness, look at the semiconductors. Again, is it possible they, you know, they get a dead cat bounce tomorrow? Sure. Again, I'm not guessing. I I'm not trying to guess. I'm not trying to predict. I'm just trying to put you in a situation they start losing specific channels, the price action should follow. What we've been seeing now back-to-back months months. Actually, it's been a lot of months. It's been one day that the Mag 7 stocks are strong, the Microsofts, the Metas, the Googles, the Amazons of the world, and the next day they're weak, and then these semiconductor stocks rally. It's going to be very interesting to see what happens tomorrow. But, right now we did give you guys very very specific levels for the Qs and the SMHs going into the foreseeable future. Um, you know, let's see what happens. But again, the longer we stay below the 50-day moving average on the Nasdaq 100, the higher probability we are going to see lower prices. So, the bulls' job in the next couple of days start reclaiming some big levels. Start, you know, start negating some bad news. Start, you know, deflecting, um, you know, big big go washouts, right? Starting golfing them. Again, if if if the buyers are getting restless and the sellers are getting aggressive and you are building below, you know, big mackerel levels, nothing good's going to happen if you are a permable long-sided trader. Guys, unfortunately, I have to run. Hope everybody's doing well. I just wanted to kind of put you guys in the right frame of mind at least going into tomorrow's session. We'll see what happens. We'll see how it plays out. Guys, God bless. I will see you all tomorrow. Take care.