Top Trades For Next Week, Mega Movers, Chart Levels & More

Summary

In this video, Gareth Solay, Chief Market Strategist at Verified Investing, breaks down the latest developments in the stock market, including the impact of the Federal Reserve, elections, and economic news. He analyzes key charts for the S&P 500, NASDAQ, and individual stocks like Nvidia, Pinterest, and Bitcoin, offering technical insights on potential market movements. Solay emphasizes the importance of technical analysis over emotional decision-making and discusses factors affecting commodities like gold, silver, and oil. The video aims to guide investors by providing a data-driven approach to understanding market trends and probabilities.

Takeaways

• 😀 Market update: The stock market has seen significant moves, including the Federal Reserve meeting, the election, and economic news. Earnings season is winding down with smaller companies reporting.
• 😀 Technical analysis focus: Gareth highlights key resistance levels for the S&P 500 and Nasdaq, using historical trendlines and patterns to gauge potential market movements.
• 😀 Potential for a small pullback: Despite a recent rally, the S&P 500 faces significant resistance, and a minor pullback is expected, possibly around half a percent.
• 😀 Nasdaq still has room to run: While the S&P 500 faces resistance, the Nasdaq may still have some upside potential before hitting its resistance level.
• 😀 Caution at major resistance: The S&P 500 is approaching a key historical resistance level (the 1929 high), raising concerns of a potential large market correction.
• 😀 Nvidia's technical outlook: After a significant drop, Nvidia is nearing a key resistance level around $158, which could mark a potential top for the stock.
• 😀 Bitcoin’s breakout: Bitcoin has broken out technically, and if the stock market continues its upward trend, Bitcoin could see further gains, potentially reaching $80,000 before a pullback.
• 😀 Gold and silver: Gold is undergoing a minor pullback, while silver might be forming a head and shoulders pattern, which could indicate a bearish trend.
• 😀 Oil support level: Oil has strong support at $65, a level going back to the 1999 and 2008 market collapses. If broken, it could signal a deeper decline in oil prices.
• 😀 The importance of technical analysis: Gareth emphasizes that technical analysis helps traders make decisions based on probabilities, removing emotions and speculative thinking from trading.
• 😀 Market philosophy: Rather than following social media hype or analyst recommendations, investors should base decisions on logical analysis and established technical levels to manage risk and maximize returns.

Q & A

What is the current market sentiment as described in the script?

The current market sentiment is described as cautious with a bit of uncertainty. The speaker suggests that after a week of significant market events (such as elections and Federal Reserve announcements), today could be considered a 'hangover day'—a day of consolidation with either a small up or down move, but no major changes expected unless breaking news arises.

What chart pattern did the speaker mention for the S&P 500?

The speaker mentions a wedge pattern in the S&P 500 chart, which broke down but didn't reach the expected level. After the elections, the market rallied, but now the S&P 500 is encountering resistance at a significant level, making the speaker lean towards a small down day.

Why is the speaker concerned about the S&P 500's current levels?

The speaker is concerned because the S&P 500 is approaching historically significant levels, particularly a trendline that connects the highs of the 1929 Great Depression and the dot-com bubble. This trendline serves as a potential resistance, raising concerns about a possible large market correction.

What does the speaker predict for the NASDAQ's potential move?

The speaker suggests that the NASDAQ 100 (QQQ) could still have some upside left. This is based on the fact that it is close to a key resistance level, which could lead to a short-term rally. The resistance level connects the 2021 bull market high and the pre-collapse high in July 2021.

What target does the speaker have for the S&P 500?

The speaker has an upside target for the S&P 500 of around 6,000, and possibly as high as 6,100. However, the speaker expresses caution about the market reaching these levels, as significant resistance is approaching, which could make further gains challenging.

What does the speaker think about the stock NVIDIA?

The speaker has an upside target for NVIDIA of around 158, based on a technical trendline. While this is considered a potential level for caution, the speaker is uncertain whether NVIDIA will reach this price before or after earnings, which are scheduled for November 20th.

What is the significance of the logarithmic view of the S&P 500 chart?

The logarithmic view of the S&P 500 chart helps remove the impact of price changes and shows percentage changes over time. This view allows for easier analysis of long-term trends and helps highlight major resistance levels, such as those from the 1929 high and the dot-com bubble, which the market is nearing.

What is the speaker's strategy for trading Nvidia?

The speaker is cautious about Nvidia and suggests that once the stock reaches the technical level of 158, it could be time to be cautious and possibly prepare for a correction. This could be similar to the drop Nvidia experienced from its June high to the low in August.

What is the speaker's outlook on Bitcoin's price action?

The speaker is optimistic about Bitcoin's price, as it has broken out technically. However, the speaker notes that the breakout is not yet fully confirmed, and the future direction will depend on broader market trends. A possible short-term target for Bitcoin is around 80,000, with potential for a pullback to the previous high at 74,000.

How does the speaker view the role of technical analysis in making investment decisions?

The speaker emphasizes that technical analysis removes emotion from investment decisions by focusing on probabilities rather than hope or speculation. By using support, resistance levels, and patterns like the 'scene of the crime' (where breakouts occur), investors can base decisions on historical patterns and data rather than media hype or social influence.