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A Simplified View of the Stock Market SPY NDX

TVC:NDX   NASDAQ 100 Index
NASDAQ, NDX / QQQ , has been leading the stock market rally. In my opinion, we don't need to take any other chart / index into consideration when looking at the trend of the stock market. We recently reached the top of a large pattern that goes back to 2018. I mentioned in a previous idea that the price is likely to find resistance on the top line, and it did.

Everyone needs to be mindful that long term investors see this exact same pattern which is what makes it so effective to trade. In terms of probability, price is likely to be contained within these two lines until the market breaks out of this pattern. If it does, overbought becomes oversold. For instance, if NASDAQ breaks out of the top of this pattern and holds, then the price is no longer overbought, it becomes oversold and may never visit this structure again. In other words, the top of this pattern becomes the new bottom (support). The opposite is true if price breaks and holds the bottom of the pattern, although less likely as Nasdaq pretty much only goes up when looking at the monthly chart. I would buy with both hands if the price reaches the bottom trend line again, but it may never reach it again if the price breaks out of the top of the pattern and holds.

Today, Nasdaq has tested the previous all time high which made it an amazing point of entry for longs. If this holds, we may see the price test the upper trend line and/or break above it and hold. If this new high doesn't hold, we may see price revisit the bottom trend line , although it's hard to fathom the fed letting this happen seeing as how they're willing to do everything they can to keep the trend upwards.

As a side note, I believe everyone needs to quit with their bias. I have been reading multiple forums, reddit, and tradingview chat and I cannot believe how many people's minds are clouded by their emotions / feelings on which way the market should go. Some people refuse to buy any point of this rally, even with a stop loss, out of principle and strong belief that the market is manipulated. Yes the market is manipulated, and it always has been, and it's likely more manipulated now more than ever, and in 10 more years, according to the trend it will be even more manipulated than it is today. However, are you willing to lose money to protect your ego? Do you put your ego ahead of those you provide for? We're traders, not psychics, no one knows with any certainty which way the market is going, we can only think in terms of probabilities and set our targets and stop losses accordingly. We should never trade based on what we think SHOULD be fair. Life is not fair, nothing is fair, and for those of us who have not dealt with that reality, it's never to late to deal with it and trade what's in front of us.

If you suffer from a strong bias, it's time to quit reading the news and to make yourself a big reminder that you only need to trade the chart, and that means trading with the trend WITH a stop loss.

How do I see the trend? Bullish , obviously, but with a defined ceiling and floor of a pattern that is facing upwards - this is what is in front of me. This ceiling and floor will continue to define the the trend until price breaks out of it.

To those of you who cannot break a bias that keeps you from effectively trading the chart, it might be best to trade something you absolutely know nothing about and don't care about. Doing this will help you trade the chart, not your emotions or bias.

If this helped you in any way, please upvote and follow. This will encourage me to create similar ideas.





Comment: I'm still receiving comments from people with a strong bias who believe the market should be going a certain way because it's a "scam". Common guys, we're on tradingview and we should be trading the chart, not our opinions. If this market offends you to the point where it influences your trades, you need to take a step back and remember why you trade in the first place - you are here to make money. We need to put our feelings aside when determining probability / targets / stop losses.

I agree, it's a scam. Scammy scam scam. I'll scream this into my pillow and take some pills to deal with my PTSD. Doesn't matter how I feel, I'm wrong half the time anyway and I'm not afraid to admit it. That's why risk reward is so important. I think most people are wrong half the time as well but their ego stops them from realizing this. Trade the chart and probabilities where risk:reward is in your favor regardless of your opinion!
Comment: I added a 2nd part to this idea better showing the bull case - a possible parabolic surge, which you can find here:

My goal is to find the best risk:reward setups. For instance, if you risk $1,000 at a chance to make $5,000, you can afford to be wrong 4 out of 5 times and still not lose money. I hit my targets over 50% of the time.

Comments

This channel means nothing... because it will break right through it when the selling starts. The fundamentals are all toxic and decayed, and what you are witnessing is the biggest equities bubble ever that is rallying literally on ZERO good news. GDP, retail, housing, debt, unemployment are worse, FAR worse than 2008 but, thanks to the Fed, its rallying because they know the economy is dead and had they not stepped in back in March, we'd be below 10,000 on the DJI. Absolute garbage market.
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ttrending WorldEconomics
@WorldEconomics, this is exactly what I'm talking about when it comes to a strong bias. "Garbage market", you're referring to how the market is manipulated and propped up by the fed. To make money from this market you only need to look at price action, fundamentals will not help. Imagine playing a game of Monopoly where one player owns the bank and can buy anything they want. They can't go broke, they just grab money from the bank. This is who you're betting against. Will the fed lose this game or will the bank eventually run out of money? I believe they will devalue the dollar until it's worthless before they let this market crash below that main supporting trend line.

However, I don't need to bet on this opinion, I can continue to trade what I see on the chart and make money both ways. Unless you're shorting the top of this pattern with a large stop loss, staying short while you see with your own two eyes bullish price action is a disservice to yourself and those you provide for.
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@ttrending, You are hoping they pump the market because you profit from it, but, the day of reckoning is when the dollar is dropped. Goodness sake, Germany’s puppet in power just said “we need to see the reality of a world where America isn’t a superpower anymore” and that’s precisely what is coming. Not in decades, but in 1-2 years at most. Zimbabwe went from a stronger currency than the US in 2007 to hyper inflation in 2008-09. It won’t take long. More countries have dropped the dollar in the last 6 years than ever.

The reason America was the world power both geopolitically and financially is because the government was unified for the most part and the people had morals and they were patriotic. Today? You have THE greatest division in government and majority of Americans hate the flag, hate America, hate freedom. The world sees it, America is literally on its last leg. It’s over. This empire like all empires has collapsed. Nothing the Fed can do to stop it, in fact, they like all central banks are the sole propagators of this global collapse.
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ttrending WorldEconomics
@WorldEconomics, I am not hoping for anything, I'm keeping an open mind to both possibilities. On the contrary, you are hoping for the market to go down so you can profit from it and your are not open to any other possibility. There is no moral high ground to the bull or bear case. The market doesn't care how we feel, and the market may go parabolic here, or it may drop like a rock. Keep your mind open to both possibilities and don't trade your emotions. In either case, use a stop loss, don't be stubborn and trapped in a position that will be difficult to get out of later.
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Keep shorting guys
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Thanks, I needed that talk
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ttrending Tiger_Style
@Tiger_Style, no problem, PM me if you need someone to chat with. I've been there before (betting against long term trends). I think a lot of people have. I may make a step by step guide on how to deal with this type of temptation.
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ruimnetob ttrending
@ttrending, please do
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Another comment, to those of your who short "scams" because you feel (you know in your heart and soul) they are scams, and don't trade the chart, just remember those who felt the same way about Bitcoin early on. We're here to trade the chart and make money, not share our opinion through our trades.

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I like your idea, look at my indicators I shared in the scripts
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