Hey traders!
Every Monday evening, I post a weekly market review video on the Simpler Trading YouTube channel with a few of my favorite ideas, along with the specific sectors and areas of the market I’m focusing on. Yesterday, I walked through why stacked squeezes across timeframes were driving the Nasdaq, and why semiconductors were the place I wanted to stay.
If you missed it, check out the full breakdown here:
Why I trade the Squeeze
Today, the market is showing follow-through in line with my squeeze signals.
The S&P 500 and Nasdaq are pushing fresh all-time highs as yields ease off their recent extremes and oil pulls back. That is the same backdrop I outlined: index futures holding structure (S&P off the 50 SMA, Nasdaq on stacked squeezes) and leadership still sitting in high-volatility semis.
What followed through from the video
- MRVL was the cleanest chart I showed — squeeze, rising volume, targets in the 375–400 area. It jumped more than 6% today after the investor day revenue targets were announced. This is exactly why I care about the pattern before the headline. The chart was already set up; the catalyst just gave it fuel.
- NVDA continues to fire long, heading towards targets I have noted (prior reference near $240, with $250–260 as the next zone I’m watching).
- TSM ripped when it hit the Earnings Hot Zone, and traded to new, all-time highs in preparation for earnings next week.
- AMD and ARM just entered the Earnings Hot Zone today. While I always prefer a pullback to buy on entry into the zone, AMD is not giving us that opportunity, as it’s already up another +3.49% as of this writing. ARM is above the 50 SMA and holding the 100 SMA, but it doesn’t have the same stacked-squeeze look as MRVL. While I like the entry into the zone, it doesn’t have the squeeze I love to see. However, the weekly chart pattern looks fantastic!
- I already took profits on MSFT and SpaceX as discussed. SpaceX still has room toward the $180 area on my map if the trend holds; I’m not re-adding just because the indexes are green.
Beyond the video, I have a few more ideas for you. Let’s talk about short squeezes!
The Short Squeeze Watch
With new highs come new potential short squeezes. Short squeezes typically do the best when the market is at new highs because momentum and volume are coming in, and sentiment is strong. Tickers on my short squeeze watchlist typically have a 10%+ short float, which is the threshold I use to consider it “high.”
Check out a screenshot of my watchlist today below:
I use the watchlist by starting with the tickers that are up the most on the day. I’m looking for tickers breaking through overhead resistance, names with upcoming earnings, plus a squeeze on top of a short squeeze. As you can see, many of these names have a squeeze on top of a potential short squeeze! That is where I start. Do you see any names you like on the list?
After that, I filter through the technical setup of the Earnings Hot Zone.
Inside the Earnings Hot Zone
As we enter October, I have a long list of stocks that are entering the Earnings Hot Zone. What I’m finding very interesting is that the Magnificent 7 appears as though it’s finally gotten it together! For the last two years, these stocks as a whole have not seen reliable rallies going into earnings, with a few exceptions. This quarter, I have setups on Amazon, Apple, Google, Microsoft (already took profits), Nvidia, and Meta. Netflix is, and has been, a bearish Earnings Destruction setup for quite some time. Tesla has been mixed.
But what I love about this is that the vast majority of the basket is moving together. This is fantastic news for the Nasdaq and the stock market as a whole!
Take a look at Amazon in the Earnings Hot Zone below:
While the ticker has been recovering off the critical 200 SMA support zone, it is so close to breaking out above resistance and rallying directly into earnings. Given that it experienced two post-earnings gaps in a row and has an average Hot Zone move of 4% during this time frame, I believe a breakout above $257 on high volume would be a great entry ahead of the October earnings report. Keep in mind that Prime Day is today and tomorrow, so Amazon may have some news coming out shortly that could impact this setup.
Opportunities Abound
While the market was largely quiet in September, I don’t think that will be the case for October. Between the indexes making new highs, multiple high-momentum tickers already rallying heading into earnings, and many more coming up, I think it’ll be a strong month.
