- Why I’m closely watching the major SPY and QQQ index funds…
- What I see in the BTC chart (and how it could affect the entire cryptocurrency market)…
Hey, Evolver.
This week, I can’t help but focus on the moves going on in the major indexes. I’ve said it before and I’ll say it again — it’s important to look at the big picture.
I’m currently watching SPY, QQQ, and BTC more closely than any single stock. In other words, I’m zooming out my market outlook.
With that in mind, let’s go over what I’m seeing in the charts…
SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ)
Over the weekend, I pulled up several charts I’ve been watching closely over the past few weeks.
I noticed that they all seem to be reacting to moves in the major ETFs — the SPDR S&P 500 ETF Trust (NYSE: SPY) and the Invesco QQQ Trust (NASDAQ: QQQ).
If these vital tickers back off near their previous all-time highs (key levels of resistance), nearly every other stock in the market could lose steam simultaneously.
Then, I had an epiphany…
At this moment in time, SPY and QQQ are more important to track than any individual stock.
You could argue that this is always true. But when the indexes are nearing major levels of resistance, every ticker in the world is vulnerable.
In short, keep SPY and QQQ near the top of your watchlist this week. Set alerts near key price levels, then trade your other setups accordingly.
I use StocksToTrade to build my watchlists and set my alerts — it’s my favorite software, period.
But StocksToTrade goes far beyond watchlists and alerts. It can be a powerful tool to help you study and trade. My buddy Tim Bohen is the lead trainer for STT. Check out his big announcement about an amazing new tool here.
Bitcoin (BTC)
Let’s move on to a setup that I find even more intriguing than the stock market indexes — bitcoin (BTC).
Right now, the cryptocurrency market has a lot in common with the stock market indexes. The charts are nearing all-time highs and trader anxiety is ramping up.
I see two possible scenarios playing out…
- BTC smashes through $60,000, sparking a bull run toward new highs.
- BTC fails to break through $60,000, causing a big flush back into a downtrend.
In either scenario, some juicy setups will likely emerge.
So how will I look to trade the crypto volatility? I’m hoping to trade options on crypto stocks.
Here are a few of the wild crypto momentum plays currently on my watchlist:
- Marathon Digital Holdings Inc. (NASDAQ: MARA)
- MicroStrategy Incorporated (NASDAQ: MSTR)
- Bitfarms Ltd. (CVE: BITF)
- Bit Digital Inc. (NASDAQ: BTBT)
If BTC fails at $60,000, I’ll look to buy puts on one (or more) of these names.
But If BTC soars above $60,000, I might just buy some calls.
Lesson Summary
- As we near all-time highs on crucial index funds, watching SPY and QQQ is critical to tracking your entire watchlist…
- The same story is happening in the cryptocurrency market — BTC is the juggernaut that could make or break the whole market in the near term…
- This is a time to watch the market and wait for perfect setups. Don’t be tempted to pick a direction before the charts make it painfully obvious…
Conclusion
Many risk assets are at an inflection point. Both of the major stock market indexes, as well as BTC, are getting dangerously close to their all-time highs.
I’m gearing up for a big move one way or the other — watching the major indexes for confirmation of near-term market direction.
I recommend you zoom out. The moves in the overall market could affect every single stock you’re tracking.
