Hey traders!
The Nasdaq continues to defy expectations for a pullback, and as it continues to do that, it is doing something amazing – setting up more squeezes!
The squeeze is my favorite directional setup. It identifies when there is consolidation that is likely to break out. That consolidation generally breaks out in the direction of the trend. So, when you have a strong trend, combined especially with relative strength, focusing on squeezes to identify moves to the next targets is what I trade.
Now, is it crazy that stocks that have already moved so much could move more? Yes. Maybe. Sure. But hey, I don’t want to miss out on moves just because it doesn’t seem rational. The market is anything but rational.
As long as you’re controlling risk, and making sure you are willing to take on the risk required for the ability to be in the move, I don’t see anything wrong with trying to continue riding the wave.
Of course, there are many who say this market is seriously overdone and needs a correction. I don’t disagree. But, I’m a professional risk taker after all!
If any of these setups show signs of failing (break of the low of the high bar, major sell signals like a VZO sell signal, major volume flush, break below the 21 EMA on the daily chart), that is the spot to say the setup failed and take a stop. But, until then, here are my Top Five Charts this week…
