A Critical Market Shift: Bullish Patterns Emerging

TNX Falls off of a Cliff

The market has been awash with fear over the bank crisis, and rightly so. Insolvent banks should concern people. But, the irony of the situation is that it caused the 10-year treasury note to tank, opening up the door for previously weak tech stocks to rally.

Check out a daily chart of the 10-year treasury index below:

Before the Silicon Valley Bank collapse, the 10-year was on a very bullish path to new, all-time highs. With the Federal Reserve’s quantitative tightening campaign, that was the intention.

Mortgage rates were headed to November highs, and interest rates along with them. But, something changed when the domino effect of SVB bank began. TNX quickly shifted from a bullish to a bearish trend. Mortgage rates came down over the last two weeks, and buyers came out of the woodwork, with many homes going pending based on my frequent usage of Redfin (RDFN) and Zillow (Z).

Could we have seen this coming? No. Can we trade it? Absolutely!

Equity Impacts

The Nasdaq daily squeeze fired to the long side, and the move was strong enough to ever so slightly break above the February highs. Breaking above February highs is critical because this is a crucial area of resistance and a critical zone that fundamentally shifts this trend. The January/February 2023 rally was predicated based on the run into earnings in January, and by all accounts, was incredibly strong and historical.

Once the market started pulling back in typical FAANG-over fashion, it easily could have gone to new lows. But, SVB went belly up, and tech flipped on a dime.

Check out the daily chart of the Nasdaq Futures below:


Now What?

So, where do we go from here? Right now, the Nasdaq is creeping through previous highs, and market leaders Microsoft (MSFT) and Apple (AAPL) have gapped through critical resistance zones. I stopped by StockChartsTV to discuss all of this and more, along with one of my favorite longs right now.

Check out the video to learn more about My Daily Five on StockChartsTV below:

Want more video content? Follow me on Youtube! I upload all of my video segments to the ‘Trading in the News’ playlist. Click here to check out my channel! 

Up Next...

Critical Stock Market Red Flags

With earnings season just beginning, we are entering the most risky time frame for the stock market. Netflix earnings week is already kicking off with a bang. The Nasdaq sold off yesterday, ending the day down -1.67%, with critical stocks like Tesla down -5.59%, Microsoft down -1.97%, and Meta down -2.28%. This occurred after escalating … Read more

Read More

Using Conservative Sell Signals To Exit

Hey traders! In this week’s trade review video, I discuss the conservative signals I had that caused me to take a cautious profit on Amazon. Sometimes I’ll take conservative profits, especially in a case like before CPI data when a news-related event is upcoming. Now, of course, if you take conservative profits, you cannot capitalize … Read more

Read More

The Biggest Pre-Earnings Movers

Identifying Stocks on the Move This week marks the kick-off to Q1 earnings season, as the banks will begin to report on Friday. This means that we are in the prime time for pre-earnings movers when stocks will move either up or down as investors make moves before earnings. To look for patterns and tickers, … Read more

Read More

Subscribe Today!

Want my up-to-date analysis, setups, top trading tips, and more? Be a Five Star trader, and join my free newsletter today!

Sign Up Now