Hello everyone, it's weekend review time again. We firmly held a long position at the end of April, and I believe those who have been following us have seen that. We've been on the road to taking profits almost every day, and so far, the returns have been pretty good.
However, I've also been reminding everyone on social media recently that US stocks are now at a relatively high level. If you're just entering the market now, you might be at a disadvantage. It's like arriving late to a banquet after everyone else has already eaten their fill, and you won't be able to find any leftovers.
The Logic Behind Holding Firmly
I've emphasized before that the reason I dared to firmly hold positions at the end of April was because my fear gauge was in place at the time, and the buying and selling momentum indicators had also begun to turn from falling to rising. These signals gave me confidence.
Profit Taking, Mid-Term Stop Loss
Last Wednesday, I reduced some individual stock holdings, such as PLTR. When the earnings report came out, due to an error, I forgot to close my mid-term options, resulting in a loss of over $400,000, which was a painful mistake. However, I still chose to hold on at the time because it happened to form a standard 21-day line technical buy point. Although the position was heavy, I didn't choose to add to it.
Last Wednesday, I felt that PLTR was almost at its peak, so I chose to reduce my holdings. Overall, the gains from the end of April to now have been quite considerable, and it's appropriate to take profits on mid-term positions. The market has been relatively indecisive recently. On the one hand, it's very resilient, waiting for a fall with sideways movement, but on the other hand, more and more uncertainties are increasing, and the power of the bears is gradually accumulating. Therefore, I made a mid-term stop loss move.
Next, we will focus on the key points for the major market benchmarks next week.
SPY Analysis
Let's start with the daily chart of SPY. 592.02 is the key maximum profit-taking point. At this level, it has been indecisive for four days. It was tested again last Wednesday but failed to break through, and the bulls began to weaken.
Therefore, I reduced my positions and took profits at the first opportunity. Currently, I only kept a core position, which is a position held for more than a year to avoid taxes. The reason I didn't add a new hedging short position is because it doesn't meet the standards in my personal system. If the situation meets the criteria next week, I will consider adding a hedging position.
Here's a key point: there's a gap below. In a strong market, gaps don't necessarily need to be completely filled. They may only be filled halfway before rising again. So, don't wait for the gap to be completely filled, and wait for the signal to appear.
I didn't participate in Friday's rebound. I just reminded everyone at the lowest point that if you are in cash, you shouldn't add to your positions. As a result, the price rebounded from the lowest point that day, and I didn't participate because I didn't think the win rate was high and it was easy to lose money. Sure enough, the price fell back in the afternoon and at the end of the day.
Overall, if the market was relatively bullish in the previous weeks, it's a bit more neutral this week. I personally am slightly more conservative and not very optimistic about the future. Because there's a gap below, and the gains have been substantial, plus I've already started taking profits on mid-term positions. In addition, the buying and selling momentum also started to turn down slightly on this day.
Learning from the lessons of the last decline, this time I will place the buying and selling momentum in a more important position, emphasizing momentum over individual stocks. I hope I'm not proven wrong this time.
The key focus next week is to see if a buy point can form near this gap. The most important thing is to observe the 21-day line coming down to half the gap's position, which is a relatively large area of attraction. If it doesn't fall below, it will form a mid-term buy point. So, the key next week is to see if this buy point can form. If it's invalid, the price will continue to fall.
QQQ Analysis
Let's look at the daily chart of QQQ. 519.89 at the top is also the key maximum guiding point. The price has failed to break through for five or six consecutive days, and the bulls have finally begun to weaken. I also reduced my positions at the first opportunity.
Currently, QQQ is in uncharted territory, hanging in the air. I feel it's slightly neutral and bearish. The Nasdaq is also weaker than the S&P 500. In my personal system, the rounded K-line pattern formed by the Nasdaq is not particularly good, and there are quite a few trapped investors above. Because some newly entered FOMO funds are constantly following, they will become resistance trapping zones in the future.
There is also a gap below. If there is an opportunity to fill it this time, it would be a relatively good opportunity to get on board. But you must see whether it forms a buy point or a sell point. Because technical analysis knows that buy and sell points are mutually convertible, you must look at the market's strength at that time, and also look at the situation of buying and selling momentum.
If a lower shadow line appears directly next week, pulling up after penetrating a bit, this is not impossible. Then you can only adapt to the situation. If you see that it's not going down in the session, you can enter a left-side position with a stop loss if you want to eat this wave. If you don't want to, you can stay put and wait for the last opportunity. These are two strategies. If the price fills the gap, you must pay attention to the midpoint of the gap. Similar to the S&P 500, this may form a small buy point this time. Or, you should observe the market's tension at that time and whether the buying and selling momentum has turned. Because the position of the gap's center point is exactly an area where the center of gravity coincides, the bulls and bears may switch at this point. If the shorts cover, I think it will also be in the middle part of the gap.
IWM: The Barometer of Market Weakness
Another important observation indicator this week is IWM (Russell 2000 Index), which is an important reason why I decided to exit most of my final mid-term long positions. IWM is the weakest link in all the major indexes. According to the barrel principle, the most deadly thing is the shortest board, which determines how much water the entire barrel can hold. So, you must pay attention to IWM next week. Its strength or weakness will determine the weakness of the entire market.
Key Target Analysis
Bitcoin
Each time Bitcoin moves sideways, it is consuming the power of the shorts. Its rising curve has been stepped recently, which is very significant. The standard for holding it is not to move, because it has not shown a sell point, but it has continued to show small-level buy points. The real large-level buy point was in April.
So far, Bitcoin has risen by 112,000. Calculations show that it still has a certain probability of rising to around 120,000 in this round, but this probability is now about the same as the probability of falling, with a slight increase in the probability of rising. At present, it is likely to move sideways, with the probability of rising and falling being about half each.
You must pay attention to the data at any time, because for Bitcoin to really rise again, it needs more powerful new players to enter the market. But so far, we have not seen the data. So, I think it will form a new oscillation area above the sideways area. The key is to look at the breakthrough situation and strength. 112,000 is a medium-to-short-term resistance area.
In any case, its stepped rise is very regular. Moreover, once it falls, the support will be relatively stable, because each step will form strong support or resistance.
Tesla
Tesla is one of my three major core positions. The other major general is Nvidia. Tesla's overall graphic situation is good. It is also one of the stocks where I've taken the least profit in this wave, basically holding it all the way.
Currently, Tesla is also a relatively well-preserved part of my three major core positions. I reduced my position slightly on Friday, and I basically don't plan to move the remaining core position. If the price comes down, I will consider adding to my position. I think its graph is very standard, going up horizontally and then building a new platform here, which is a bit similar to Bitcoin. Moreover, it is basically above the 8-day line.
Its first guiding point is breaking below the 8-day line. Coming down can be understood as a guiding point or a buying point, depending on your amount of capital and strategy. So, the 21-day line and the 320 range may be other people's buying points, and they may also be other people's liquidation points.
For me, I will not add to my position here, nor will I liquidate here. I may conduct the first addition to my position in the 280 to 300 range. I have already taken a small profit on Friday. If it falls to this range next week, I may take a little more profit, and then I will not move it and hold the core position. When it gets to the 280-300 range, I will see if there is an opportunity to add to my position.
Da Ge (Possibly Refers to DASH)
Da Ge is also part of my mid-term stop loss position. I don't think its graph is as good as Tesla's, and the entire graph has risen more sharply, with more flaws. Remember that the more violently it rushes, the weaker it is often.
Da Ge rushed very hard this time, but the time was too short to be convincing. I hope Da Ge will take a steady and solid route. After the profit is taken, you need to look at its buying point. If you can go to the vicinity of the first gap and the second gap, it will be a very good mid-term addition opportunity.
But you must observe the strength at that time to see if a buy point is formed. If a buy point is not formed, don't go in and catch a falling knife. You must observe whether the potential buy point here is formed. If it is not formed, the price will continue to fall until the buy point is formed before you can enter. Technical analysis is to enter at the buying point and exit at the selling point. You cannot trade casually or emotionally.
Da Ge is still a good mid-term target, and this round proves that it is still very strong. Therefore, you must consider Da Ge for your mid-term positions. It is still an artificial intelligence hotspot. Even if there is a hotspot switch, Da Ge is still a good infrastructure target and will still be favored by large funds.
KWEB (China Internet ETF)
KWEB is an ETF that students who follow Chinese stocks pay more attention to. Recently, I had a conversation with the chief investment officer of the issuer of this ETF and talked about the situation of Chinese stocks, the tariff war, the linkage between Hong Kong stocks and US stocks, global investment allocation, and the delisting risks faced by Chinese stocks.
KWEB's daily upward trend has not been broken and has been maintained.
I want to remind everyone that I have been telling everyone in the club for the past four years that we should be careful and vigilant about Chinese stocks. Because I worked in two Chinese stock companies before, I am very familiar with the forms of Chinese stocks. First of all, it is an away game in the United States. The core is still the leading technology companies in the United States. As a Chinese concept, you are actually fighting away from home in the United States. There are many misunderstandings and opaque things. Many people cannot accurately find corresponding targets for your understanding.
Many institutional investors will ask, which American company do you correspond to in China? For example, China's Twitter, China's Amazon, China's Facebook, etc. If there are some companies that you cannot explain clearly and strictly benchmark in the United States, it may affect everyone's understanding and valuation of you. In addition, there is also the issue of cultural communication and the impact of international relations and the situation. So, I think Chinese stocks in US stocks are indeed a big test.
You can use Hong Kong stocks and other things to do some linkages. I think this may be possible.
Overall, KWEB still outperforms the Shanghai and Shenzhen stock markets by a lot and can be followed. Next, global asset allocation should include China, because it is, after all, two major countries. Therefore, from an investment perspective, everyone can pay attention to global asset allocation and consider opportunities in other countries and regions.
After this round of bottoming and training, everyone has grown a lot. This round of coming up from the bottom is indeed very sharp, and including when I firmly held a long position in April, I was also very apprehensive. But I want to adhere to the data. Moreover, my fear and reverse indicators, as well as social media sentiment indicators, are all in place. So, I told my friends that we should firmly hold a long position.
The data will not lie, and the market is solid. We have come this far every step of the way. I think this is an essence of trading. Trading is not a debate, nor is it a verbal battle. It doesn't mean that you can talk eloquently. If you really trade well, show your rate of return or your holdings for everyone to learn from.
The truth is simple. Trading does not require you to be too smart, too flexible, or to play tricks. We are all people who have gone through bull and bear cycles step by step and have been whipped by the market, so our hearts are very calm.
Life is about having a market like the US stock market where technical analysis is very effective, a set of effective data analysis tools and systems, and a group of like-minded friends to accompany you, focusing on market data and analyzing it together, and everyone's hearts are very close.
Life is about being content with what you have, being happy for others, and being happy in your own way.
I hope this sharing will be helpful to everyone. It's spring, and remember to put down trading on the weekend, go out for a walk, play, and spend time with your family. Cherish the spring time. I wish you all a lot of profits, and see you next time!
| Indicator | Content |
|---|---|
| SPY | 592.02 is a key profit-taking point, the gap below is key, pay attention to the 21-day line and half the gap position |
| QQQ | 519.89 is a key profit-taking point, the gap below is to be filled, forming a rounded trend |
| Bitcoin | Stepped rise, 112,000 is a resistance level, the next target may rush to 120,000 |
| Tesla | Running above the 8-day line, 280-300 is a potential replenishment range |
| Da Ge | Rising too sharply, pay attention to the buying points near the gap, which can be used as a mid-term target |