There are no changes to the swing outlook. We added another 10% to our NASDAQ 100 position yesterday, bringing us up to 90% invested in the Founders Group. We are looking for double tops in Financials, Energy, and the NASDAQ 100 with a marginal new high in the S&P 500 index. Those are our targets and where we intend to take profits – but we will see when we get there.
It will be choppy today and tomorrow as we end the calendar quarter, and weekly and quarterly options expire. The NASDAQ 100 tends to sell off a bit into the end of the quarter and then pop into a rally for several weeks after the new quarter begins. Moreover, April tends to be one of the strongest months of the year. However, this must be interpreted in the context of the nominal 18-month cycle peak asserting itself soon.
I will adjust our stops higher later this morning, but for now use a close below the 5-day exponential moving average. There will be no outlook published tomorrow, which is when options will expire, and the trading week will end early. It is unwise to day trade into a double options expiration day, especially before a three-day holiday.
Day Trade Plan Today
My day trade plan always focuses on the S&P 500, but the NASDAQ 100 index can be traded by analogy if you can handle the additional volatility. Yesterday followed our script nearly to the letter with a symmetrical, bell-curve profile. Balance rules are in play again, using yesterday’s high at 3959 and low at 3934 (both rounded) as your range. Assume responsive trading (bouncing off from those levels) until a breakout of the range occurs and then monitor for continuation.
The fact that the overnight high and yesterday’s high is the same should add to the odds that an upside breakout is more probable than a downside and should govern your actions during today’s session. Should the break be downward, target the first virgin point of control at 3921.25.