Semiconductors vs. Nasdaq: Key Indicator of Tech MomentumIntroduction:
The ratio between semiconductors NASDAQ:SMH and the Nasdaq 100 NASDAQ:QQQ serves as a key indicator of tech sector momentum and near-term risk sentiment. When SMH outperforms QQQ, it signals a "risk-on" environment, reflecting strong demand for semiconductors and overall tech sector health. Conversely, if QQQ outperforms SMH, it suggests a "risk-off" environment, pointing to concerns over weakening chip demand.
Analysis:
Risk Sentiment: The SMH-to-QQQ ratio provides insights into tech momentum. A higher SMH performance often indicates robust chip demand, a positive signal for the broader tech sector. On the other hand, when QQQ outperforms, it signals caution, possibly reflecting waning demand for semiconductors.
Bullish Outlook: Recently, the SMH-to-QQQ ratio has formed a higher low, reinforcing a bullish outlook for semiconductors. This higher low is a positive sign not just for the semiconductor industry but for the broader market as well, as semiconductors often lead market rallies.
Conclusion:
The recent bullish signal in the SMH-to-QQQ ratio suggests tech sector strength, with semiconductors likely leading the way. This is a critical metric for assessing near-term market momentum, so traders should keep a close eye on this ratio to gauge potential shifts in sentiment. What’s your take on this trend? Feel free to share your thoughts in the comments!
Charts: (Include relevant charts showing the SMH-to-QQQ ratio and the higher low formation)
#Semiconductors #Nasdaq #TechSector #SMH #QQQ #RiskOn
Riskon
SOL / USD ConsolidationNeutral consolidation for a week heading into major economic data. Any sort of risk-on response from the overall market could lead to significant upside. However a breakdown could flush out a lot of bulls in quick fashion.
Upwards price targets of: 151, 158, 163, and 184+
Downwards price targets: 134, 110, 104
commodities high conviction entry in FebLooking back, commodities had a high conviction in february based on a longterm trend. Combining macd and BB break out.
Markets have either risk-on sentiment or defensive. During risk-on phase people want to put money to work, there is too much money. During risk-off or defensive, people want money and safety. Assets become too expensive. Bitcoin rallies during risk-on phases. Oil or gold can be either risk-on and risk-off . Markets are fascinating.
Faang can be a risk-on and risk-off, till everything becomes too expensive to have.
Markets leave clues. and they move on cycles.
It makes sense why commodities are risk-off . Small caps usually are risk-on (when economy does well, there are no global conflicts; ie the future is BRIGHT).
More concerns move the weight to risk-off , ie markets are a weighing machine longterm.
People tend to be stuck in one mood or another, and it's tough to adjust? markets can change gears quickly.
The most important chart in your trading career.Merry Christmas to all, I hope you and yours are well.
My present to you this year is the one chart you should ALL be watching. SPX/GOLD
Risk On (Equities), Risk Off (Gold). It will save you a TON of time/headaches, if you follow this chart.
In this video I go over why you should use it. How your portfolio would have been managed the last 50yr, and at the end give a quick method for managing your ratio between Risk On/Off.
As always, good luck in your trading, have fun, and practice solid risk management.
A clear risk on event is taking placeI multiplied the less risky Dow and Spy while dividing it with a multiple of bio, the Russel and Ark. This shows a clear shooting star candle in development this month which should signal much greater future gains in higher risk stocks and an end to this pullback in the market.
You can see that we had nice rallies the last two times that this has happened on this chart at March 2020 and Feb 2016.
I also noticed some more supporting evidence that this is near the bottom from the dark orange wedge breakout. If you measure the bottom to the peak in 2015-16 you can get an ideal exit target for the wedge breakout. Typically, you would measure from the breakout point, which it hasn't reached at this time, but if you measure from the bottom, you can see that the target has interestingly been reached to an almost exact amount.
We also have the yellow resistance and the peak at March 2020 as a pivot point for all of these lines. Not too critical of a point, I just found that interesting haha.
We also have institutions like black rock capitulating on growth twitter.com
Many institutions were bearish on the market at the bottom of the covid dip.
Finally we have a heavily overbought RSI and stoch on the monthly that also signals a top.
Now the short term future outlook looks bullish on risk to me but I was thinking on potential long term possibilities from there:
I believe that the yellow trajectory is more likely to happen over the blue one at this point to be honest. The blue option just requires too much competence in all global leaders to pull off so it seems unlikely to me and would be frankly miraculous. But it could still happen.
The yellow one would basically give investors an opportunity to exit growth at more reasonable prices before the market continues its tank fest again. And while I have this pivot point at Jan 2024, it could happen much steeper and faster and pivot later this year.
The yellow support line and the blue breakout line are most important to watch and see what option it'll be.
GBPJPY D1 - Long SignalGBPJPY is flirting between this 185 support price and 188 region, a solid 300 point range, we are hopeful to see a pullback and another opportunity to enter long from this 185 psychological price zone. From here we can look to targets 1R, 3R, 6R respectively.
A lucrative setup, with lots of mileage upside, nothing to say we can't target 190.00.
DAX Breaks Out Of A Downward Channel. Dax is in an impulsive uptrend since October 2022 and it can be trading in 5th wave, but there can be still room for more upside if the current drop from ATH will stay in three waves. For now we have seen some nice bounce, back above 15700 bull/bear level so it appears that bulls are still here, especially now when price also broke through the channel resistance line that can turn into a nice support this week.
So I am expecting further gains for the DAX whiel price is above wave (C) low at 15455.
GH
FFIE EV Penny Stock LONGFFIE is an EV pneey stock below $ 1.00 and so has delisting risk.
The 30 minute chart shows the rationale for the long trade with 300% upside.
The risk here is of a delisting which would send FFIE into the OTC market
where it could explode. This penny stock trades millions of shares per day
and trading volume has heavily increased as the price goes lower.
Given the volatility a stop loss of 20 % at $.20 is needed or even the
swing low at $.15. However, the upside technically is the 300% to get
to the YTD swing high. I believe that it could go even higher if a delisting
occurs. A reverse stock split would be a further catalyst for FFIE.
AS a basic high risk high reward scenario, I will take along position
and what will be will be.
DJIA Is Bullish, Bouncing Away From The 61.8% Fib Stocks are bullish for the last few weeks, and some of indexes are finally breaking higher on speculation that FED is going to pause the hiking cycle. US CPI print also came out lower than expected, 4% down from 4.7% so there is even greate chance that FED will be on hold soon. When that’s the case stocks can move higher much easily, but still keep in mind that for higher stocks dovish times are the ideal, but hold is not dovish, and we forget this too many times. Anyway, looking at the DJIA, the trend is in a recovery mode and looks like more gains can be underway after first correction down to 61.8% Fibs back in March followed by five waves rise and then another perfect minor A-B-C drop again into 61.8% Fib. This is definitely the Fibs that needs a lot of attention and so far we can see a nice turn higher with price threatening 34276 level. Ideally a daily and weekly closes above that figure opens room for 35631.
just an observation. $SPY vs $IEF / $HYGAppears we are running out of risk appetite. Put also looks like we have built a very nice base for a significant move higher. Hopefully, that's a risk on move, not a risk-off move.
Personally, I believe we have already corrected in each individual sector, it just didn't happen all at once like it normally does.
According to this, risk aversion and sentiment have been flat in a range for the past few months according to IEF/HYG.
XAUUSD H4 - Long Signal XAUUSD H4 - Solid bounce from the analysis yesterday in the end, position is looking healthy, but as always, to continue to trend and theme, we need to be breaking previous highs, and setting fresh higher lows. Lets see what happens this morning and throughout the course of the overlap with the data possibly catalysing this move forward.
$XBI target zone if, IF, risk-off returnsOn the weekly chart, price seemed to be breaking down from a channel and then reversed course to move higher. If this is a rubberband reaction and risk-off resumes, then this monthly frame shows a 2nd leg down that could move to 62-58.
Alternatively, if risk-on stays the course to continue January's rise, then price moves up to the 20ma, 96-100 area. Watch daily chart to see if price stays over 87-88.
DXY predictions for 2023Now that a lot of sell side liquidity targets have been met on this week, I'd like to see it comeback up a bit to rebalance the weekly FVG then drop lower into the Monthly FVG cause it would be healthy for the next expansion to new highs on this cycle, final target 120 with bumps on the roads at the lvl I drawn my pink arrow
US CPI puts Riks-on In Play; Watch AUDUSD Bulls Inflation in the US came down last week which allowed stocks finally to rally while US yields and USD came down across the board. Speculators think that FED will slow down the hikes, but further move on some of the FX pairs will now depend on data outside of the US. We have UK and Canadian CPI this week, while the focus will be also on RBA meeting minutes. So these events can shake the FX markets a bit, but based on sentiment reading it looks like risk-on is here, at least for the next few days after a positive close on Friday on the US stock market. We see DAX trading at the highs so eur may also continue higher as recovery on DAX should resume after set-back.
However, our focus for potential trade ideas can be on AUD or NZD as these two were quite strong since Thursday's US CPI data. JPY is also strong but move over extended, so there can be some pullbacks.
I will focus on AUDUSD pullbacks
Tesla vs Pharma: Selling Safety to Take on RiskRisk on or risk off? Those kind of sentiment changes are one of the most important things for traders in the stock market. Today gave an example of how quickly the herd can sometimes pivot.
Tesla, a classic “risk on” name recently struggled near 52-week lows, while “safe-haven” Eli Lilly pushed to new record highs. But Thursday’s rally on softer inflation data seems to have changed all of that and drawn investors back to riskier growth stocks.
This process of selling safety and moving back to risk seems especially visible on the intraday chart below, which compares price action minute by minute. Notice how LLY slid early (despite a lack of news) as TSLA muscled higher. Next came an inversely correlated rebound in favor of LLY, followed by more downside in the drug stock and more upside in the electric-car maker.
Most traders know this process of risk on and risk off. But seldom does it appear so clearly. It’s a good lesson on the importance of sentiment in the market.
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EURUSD(liquidity proxy)if BO parity, $ falls, gold,equity rallyEURUSD may be used as a liquidity proxy. It has been falling for a long time in a big down channel &
Is now bouncing right at the dotted median line. (4Q is historically bullish going into new year specially on
midterm election years, where markets bottom in late October)
Watch closely if EURUSD will break above parity 1:1 again in a big move. Then most probably that is where
the 4Q rally shall start extending to 1Q2023. I still believe there is still a wave 5 down for the C wave of the big ABC correction from ATH. In 2Q2023, ABC may end in a double bottom near the dotted median or even much lower to the lower channel in case of a recession, which is more probable in Europe than in the US.
After ABC completes sometime before end of recession. Equities will rally to the start of a new EW cycle.
Not trading advice
S&P500 leveraged making Sine wave pattern & returning to neckSSO is a safer 2x leveraged etf of SPX than SPXL. It recently formed slight divergence & a big engulfing candle, probably due to oversold RSI & also short coverings after Thursday’s dump & pump with investors betting massively on both directions triggered by a high CPI report.
Prices may return to the neckline (return to mean) next week.
Not trading advice