V-Shape or Bear Rally?

significant followthrough in the market bounces as semiconductors rip higher new all-time highs. Is this just a bare market bounce and we're headed lower? Or is this the V-shaped recovery that we've all grown accustomed to? And all-time highs are just around the corner. We have some recent history to do some comparison. Let's get to the charts. Learn how to trade stocks, crypto, and hype sectors with a global chat room led by professional traders, as well as daily live streams at chartguys. com. So, V-shaped nature at this point with significant follow-through. Just to recap, the past couple of weeks, we were watching NASDAQ first daily oversold conditions coming off of all-time highs. That's a back burner. That's a high probability you get at least a short-term bounce. The prior two times it has happened. One time V-shaped full recovery. The other time was follow through for the bears in the tariff situation 2024. But the initial bounce gave enough room to position before we did drop to the lower low. So confident to at least give it some attempts and now long swing positions very comfortable. If you trim a little bit, stick a stop under the low. Nothing to worry about. I'm seeing a lot of very frustrated people on social media. We've talked about how I feel that technical analysis is way better than headlines for trading markets. I think every time we get situations like this, whether it's the COVID V-shaped recovery or this, it just converts more and more people to understanding that price action and removing emotional opinions on headlines is the way to go. But the market is still very split. People that think, all right, this is a full recovery and the low is in and we're headed back to the highs. And people that think, oh, this is just the biggest, you know, bare market. We're not in a bare market, but bare market rally. We're suckering in all the longs before we roll over to lower lows. How do we know which it's going to be? So, inverse head and shoulders confirm significant follow-through. And you may be noticing it's almost like the market is ignoring bad headlines and ripping on bull headlines. And that's because in my opinion, price follows the path of least resistance and the headlines just magnify it one way or the other. Once you get the initial shock of something new out of the way, the market has then digested it enough for it to not be the driving force. And so again, there's just baffled people saying, why on this negative headline do we drop. 1% but on this headline that isn't really that positive, we're going up 1%. It doesn't make any sense. So, let's look at a couple recent examples of and then we'll talk about specific sectors because there is still some glaring weakness out there and there is some glaring strength. It's a tale of two markets at this point. Who do we believe? I believe the bulls. As I've been saying, this monthly consolidation is extremely healthy. There's no red flags whatsoever. But let's look back. So, we're going to look at two examples. The first is the V-shaped recovery from the 2024 lows. And again, here's the example where we had first daily oversold conditions gave enough of a bounce to position, but it was a bare flag. At this point, the bounce retracement, this isn't a bare flag. We've seen significant enough recovery, but how do we know if it's a Vshape or let's go to 2022? This rally here was very significant. So, we had a situation where we were off 10, nope, 12. 7% from all-time highs and then we bounced 8. 6%. And that was a retracement size of let's just say 65%. So, let's just 12% down, 8% up, 65% retracement roughly speaking. So, now we've got retracement roughly 65%. Pullback was more like 10. No. Yeah. 10 point whatever bounce eight whatever. So, similar enough where it could be that lower low. One major difference for me is we already had a distinct lower low after a significant bounce and that was just another one. But that's possible. What did it look like? Vshape daily stairst step higher low every single day 11 days in a row pullback normal healthy consolidation. That's inevitable. That was probably hourly oversold off daily MA12. No red flags whatsoever. Daily high or low set. All right, let's see if we can get continuation. Okay, little daily downtrend. That's the first red flag. That's the first sign of the possibility

of weekly consolidation. Then the question was, do we set a weekly high or low or not? And then this is when it started to get ugly. So the bull recovery, what's the difference? Higher lows, higher low, higher high, higher low. And this is again that other time would have been a lower high, lower low there. Nope. Higher low, higher high. Big pullback, but a higher low, higher low. You get the idea. Then some sideways, then continuation. A lot of higher lows along the way. Stair steps are great for fast, hard moves in both directions, but trend changes are much more convincing and believable. So, the failed bounce was a stair step. Little supports established on the way up and then once we started that daily consolidation, it was game over as far as never going back to those highs. This isn't a stair step. We have established some support on the way up. But the next most useful information for me is going to be again this is not a back burner environment. But we've seen periods of consolidation that lead to continuation and the market starts trading as if it's in blue sky breakout all-time highs back burners even when it's not. What does that look like? It looks like five minute oversold marking hourly higher lows. Hourly oversold marking daily higher lows. That's the next most important information. When the inevitable daily consolidation comes, which may be shaping up first thing this week, looking at how Friday's candles went, what's the response to first hourly oversold conditions? Does it set a daily higher low off EMA 12 like that failed attempt and see continuation more like the V-shaped recovery? or do we pull back and then do this and say uh oh because again weekly lower highs are still on the table here and we will eventually need to confirm weekly uptrends and so that's the next major bit of information. So, I've definitely been taking some bull victory laps, but I'm still open to weekly lower highs, and I'm going to be watching very closely. The clues of what happens during consolidation will give us significant information in terms of gauging the strength of this bounce. And I'm still very much open to monthly bull flags with semiconductors leading the way, but I'm not all in bulls to the moon just yet. Uh, and again, we're gonna find out real soon what that consolidation looks like. And so, S& P 500, daily higher low will be on watch. I will be looking long for daily higher lows. Uh, again, I will take some protection as well. So, I'm playing things both ways and I'm almost viewing, you know, energy and oil as hedge to long positions in the market just because they're mostly inverse to the S& P 500 and the NASDAQ. And I did some of that this past week. But uh again, just looking to play the lead bulls long, semiconductors, and the weakest names bare and try and position and get risk-f free with some of both sides just to just in case how this plays out. So NASDAQ big time bounce again. Monthly candle has a long way to go, but it's extremely healthy. Even more so on QQQ just because it's that nice hold of EMA 12 again. Wow. Did we already set the monthly high or low? We did. QQQ low. NQ has not. But again, just remember who was doing the level-headed technical analysis most likely scenarios and who was all caught up in headlines and you know we're about to collapse because that is the important separator in markets and people analyzing markets. in my opinion because this is an extremely bullish monthly chart. Okay, so the NASDAQ, we've got our three components, semiconductors, MAGS, and IGV software. There's overlap among them. Semiconductors putting on an absolute show. What was it last week's video where I said this SMH weekly chart is what keeps the bears up at night because it is extremely bullish. We talked about how we finally rolled over. Bears finally proved something. It lasted one day. We got back above it. We back test and held and then it was no looking back. Straight up 10% in a couple of days. A blink of an eye. Extremely strong. We knew there was no red flag on that monthly chart. And the monthly bull flag and all-time highs continue. SOXX as well. Individual names NVDA. Still not there yet.

Monthly chart off EMA12. And same thing, what does daily consolidation look like? We're going to look for a higher low. There's a monster wall of resistance here. So, this is going to be important in the short term. One of the e next big pieces of information aside from response to first hourly oversold conditions in individual names and the indices. Next big information is when semiconductors see daily consolidation, which is inevitable. I've said this before. I'm having dja vu. We've done this before on the way up. When semis pull back, what do the other sectors do? Do we get rotation into software and the financial sector with earnings coming up or does everything drop together? If everything drops together, that's a check mark for bears for weekly lower highs. If we get some form of solid rotation, that's a check mark for bulls. We know we have to see daily consolidation in semiconductors. what's going on elsewhere as that happens. Memory. So, let's go. So, semiconductors, we know all bulls. Memory just MU beautiful big bull move, but SNDK leading the way back to all-time highs. Third gap up in a row on Friday. So, not surprising to see some profit taking, but backers are on watch here. Hourly oversold for a daily higher low. WDC, do we get all-time highs there? Yep. TSM has earnings that's going to be important on Thursday for semiconductors, but memory continues to lead the way. Semiconductors continue Mags is always the middle of the road. Most days it's semiconductor lead bull. MAGs the middle of the road. IGV software lead bear. So MAGs, the weekly bounce is much less impressive. And so for the NASDAQ to get back to all-time highs and join semiconductors, someone else has to help. Semiconductors can't do it alone. So the lead mags bulls, Amazon had a monster week. Look at that gap fill recovery. That monthly chart is trying to recover. And Apple, Apple chart still just fine. Simple statement. If this base of support in the 240s holds, we're going to all-time highs. Two week equilibrium. Higher low, lower high, higher low, tightening up. Google monthly chart, no red flags whatsoever. Monthly higher low is set and looking back up towards those all-time highs. The weaker MAGS names, well, we're not going to go into every other name, but the others are weaker. So, Mags, do we get a turnaround where Mags starts to join more convincingly for the bulls? IGV is falling apart software. So, I'm keeping an eye out for when it's time for software rotation, but I'm also not going to be forcing it, nor am I just going to be scaling in. We can go down to 65 on this chart for all I know. But I played this last bounce really well and it was entirely based on watching relative strength return. So that's going to be key for me. IGV divided by QQQ. That is what clued me into that bounce. It's back to all bears at this point. So that's something I'm watching for. But bears are loving software. Bulls are loving semiconductors. Who's going to join whose team? Does semis weaken while software stays weak? Does semis see daily consolidation and software sees a big bounce? I don't know. That's these are the observations we're going to make to give us very important information to determine probabilities into Q2. the rest of Q2. PLTR also dropping with software, but Trump tweeted about it. And you know, I see online people saying, you know, anything Trump touches goes bankrupt and his meme coins and his hotels and all this stuff. Okay, that's fine if you want that opinion. But his in his second term of presidency, he's been tipping off trade after trade. INTC, Boeing, Rare Earth, just in terms of the administration and the uh you know, investments that they're making. So, he posts on Friday, I lucked out. I bought PLTR 90 seconds before his tweet just because I saw the support level, hold 124, hold, hold, break, pop right back. Honestly, the reason I was in that PLTR trade is the exact same thing that semiconductors did on the daily, except it was on the one minute time frame. So, that's luck, right? Luck happens in markets. I'm okay with some luck. So, I'm on the one minute and I'm watching this bounce recovery attempt. And I'm

looking at, okay, 124 holds, pull back, 124 holds. I'm noticing clear defense at 124. It holds again and then it finally breaks. And oftentimes, you get information not just from something holding, but the response to it breaking. So, we're going to get information not just from the S& P 500 and the NASDAQ going up. We're going to get information when it breaks into consolidation. Same thing here. We finally break the level that's been battled over for the last eight minutes and we pop right back above it. So, I mark it by and my stop goes under that low with a tiny bit of wiggle room. So, you know, my stop's now down at 12379. We're either going to follow through on this bounce because I'm seeing bulls playing defense again is a shift relative weakness all morning. That's the first sign of strength I was seeing in the bulls. And so, okay, we pop right back above it. Little bottom fishing play. I'm risking 3540 cents and then luck out into the headline. But anyways, you know, he compliments PLTR. They're doing a great job in the war. Whatever. Uh that just means he wants the price to stop going down. That's what that tweet is. So again, remove your opinions of the man, the administration, whatever. If the president wants the price to go up, history has showed us in his second term, it has a pretty good track record of doing so. So if IGV is going to bounce, PLTR is one of the top places to look just because there's relative strength now. PLTR divided by IGV way stronger. The only reason I'm calling PLTR, well, I mean, it is in the uh ETF, but clearly doing the same thing, a monster gap and trap down 20 whatever percent. And so, this has to be a bare break with no follow-through. And it has to be a falling wedge for a monthly higher low. So, bare break right into a bounce. Bear break. If we go right into a bounce, we're going to be viewing this as a falling wedge. So, again, I don't have high conviction right I do have a swing runner just because I stumbled into that luck to get a lot of profit cushion from a day trade, sell the majority of it. Now break evens under the low, but um is this a falling wedge is the question. But potential volume climax, bullish reversal candle, just going to look for a daily lower high, but just something I'm keeping an eye on. And IGV has a very important support here that did break. But again, same concept as far as semiconductors breaking a key short-term support and Vshaping. So this coming week, if we end the week over 76s in IGV, I'm going to be calling this a bear break no follow through. And again, this is a very important one, two, three, four holds of this support in the last couple of years. This is very important. Uh so again, got to pop right back above it. If we just see a daily lower high and lower low, let the bears continue doing their thing. That's my approach. But keeping an extra eye on PLTR, but only confident in PLTR bulls if IGV shows us bottoming signs. That's my approach for that sector. All right, now we're going to check in quickly on a bunch of other sectors. So again, semis need help. semis can do a lot of heavy lifting but they need help from other names other sectors and so the financial sector has earnings coming up they always kick off earnings season Netflix as well TSM semis but XLF has work to do because anything under 5411 if the entire market looked like XLF I'd be way more open to just a weekly lower high and you know bare continuation so got to see this back test hold if we continue pulling back this wall of resistance that we battled battle battled and finally got over that has to hold as a back test. So that's going to be important but need to see the financial sector up in the you know 53 plus if we're going to be real confident in S& P 500 and NASDAQ monthly bull flags. healthcare. Same thing that weekly bounce is not impressive. Weekly EMA12 rider and now it's resistance. So you know this looks like a rising wedge to set a weekly lower high. We're going to talk about that in medals that's on the table more of a channel I suppose. But uh again who's going to join semis and step up as far as our other smaller sectors that started the year really strong. Some of them have significantly recovered. XLB materials, we knew the weekly higher low was the most likely scenario. Now it's just a question of do we see a weekly equilibrium or are we V-shaping

XLI industrials healthy weekly high or low? Big bounce possible for an equilibrium. We'll see. But lead bull weaker names that started the year really strong. XLP, Consumer Staples, big move, weak bounce. transportation, middle of the road, decent bounce, but plenty of space for the lower high. So again, it's a mixed bag. You can look at a bunch of individual sectors and say this is bearish and I will agree. And you can look at a bunch of indiv individual sectors and say this is extremely bullish and I'd agree. It's trying to piece all that together for the market as a whole. And again the market bulls have the advantage just in the sense that all these mechanisms with the ETFs and the waitings and the you know it favors bulls but again I we can see both paths forward and we don't need to be all in on one or the other with conviction. We can wait for more information. So again I'm long I've got the long lean but I will be pivoting quickly if I get the red flags. There just aren't any for me at this point. DXY. Actually, let's check on small caps a bit. We talked about small caps last week. So, again, IWM, look at this monthly chart. How it's just so strong. Monthly EMA 12 potential bull flag. Look at the back test. Back test of resistance as support and hold held it. Regional banks monthly higher low set. Biotech sector weak day on Friday, but overall did confirm its bull flag. Still resistance in the low30s. So going to keep an eye on that. It's healthcare that's holding back the biotech sector a good bit, but this is a potential megaphone. Again, I'm not going to be shorting the biotech sector. I made one attempt and just took a little perfectly reasonable loss. But uh I don't like the way it trades. So we'll see. Dollar. We were talking about this megaphone. It is still a megaphone. We had a daily head and shoulders rolling over bull breaks lacking follow through sloppy drawing but you get the idea. We were watching this and so we'll see if we keep heading back down back towards that support line. metals. So, we know the weekly lower high is the most likely scenario and we're watching the daily uptrend for signs that it's being set. Last higher low on gold. Some relative weakness to the broader market, but bulls keeping control of the bounce for now. And we're going to be continuing to watch the daily uptrend. Higher low, higher high, higher low, higher high. Not a ton of follow-through, though. And silver, as I mentioned, is a potential rising wedge. Again, weekly, we're looking for the lower high 12hour chart. Watch this rising wedge to start next week. If this 12-hour rising wedge breaks bear, the weekly lower high is likely being set. If we hold the 12-h hour higher lows, bulls keep full control. Energy and oil. So, oil gave us the technical most likely scenario in a weekly lower high. I tried for it at 107 or so. I was a little early. We got it at 117. Early is wrong. I stopped out. Little loss. But now we're watching for a weekly higher low compared to 8437. Higher low. Lower high. Watching for that higher low. Daily chart. Some inside bars struggling to get the bounce going. 12h hour trend change needed. But again, just watching if we break that low of 8437, that would be pretty meaningful to me. But I wouldn't be surprised to hold it and tighten up for another couple of weeks. And the energy sector finally broke its weekly stairst step. That was really likely with how we closed last week. Little dinky bounce. I grabbed energy long. You know, my mindset on Wednesday having some long exposure. You know, I had MU and some other things that I grabbed just from NASDAQ daily oversold bounce day and then positioned in some swings, but I grabbed XLE because my mindset was, okay, we've gone straight up. Bulls are going to look to buy the dip. Weekly EMA 12 4hour oversold conditions. Was it a back burner at that point? Yep. So, uh, I grabbed that and sold some into the bounce. And now my break even is under the low. And I'm going to see if

that can stick because again, I love when I can get a long risk- free and a short risk- free. And there's no such thing as risk- free in swing positions, especially not in energy these days. We'll call it low risk because again, you know, if we gap down on Monday 3%, then we'll be, you know, I'll have a small loss. So, I'm okay with that. Uh, but that's how I am approaching this current market. I'm going to try and position in some bare names for weekly lower highs. I've got the longs from the daily oversold back burner. And again, the people that talk smack about RSI, it's just it confounds me. You want to keep life simple, look at the last again, success, back burner. Failure, but plenty of bounce to position and then stop out. Break even or low risk. Success. I mean, it's just there's another one. another failure that gave some bounce. So, even the failures give it's not like we're just free falling right through them. But again, it's a context that everybody misses trying to cut bread with a spoon. Context. Okay, I think that's all I want to talk about. I'm sticking with no, I don't want to say anything else. Do good things. We'll see what we get. Be open-minded to both sides. Let price action dictate things. Quick summary. What's the response to first hourly oversold conditions in the indices? Daily high or low in continuation. If that happens, probability for a monthly bull flag increases pretty significantly. If it doesn't, weekly lower high is definitely on the table. What happens to our other major sectors, notably for me, financials, software, when semis start inevitable daily consolidation? Is everything dropping together or does it drop and other things get bounce follow through? Those are the next two most important pieces of information when we determine bull flags, V-shaped recovery, or weekly lower highs before bears take back over a bit. At this point, my bull I'm 70%. Bull flags and all-time highs coming, but you know, next week I could drop that down to 55%. I am very agile and unattached to my opinions because every single day is new information. See you next week. They didn't know that all the spots.