“Last Week” Blog

Adam Sarhan believes that we’re likely at the beginning of a big bull market. Traders who missed the beginning of the rally are having FOMO and looking for opportunities to get in. Adam says there are still good entry points, but they may come with more risk if the market gets too extended.

We’re still following the QQQ as the leading index. This week support was defended around the 21-day moving average. While we are in a sideways consolidation, there are new breakouts and the bulls are in charge.

While the Nasdaq and QQQ pause to digest November’s rally, the other indices are rushing to catch up. For A.M.P.D. traders it’s a time to be patient, wait out the sideways consolidation, and give their trades time to digest recent gains and make the next move. Also, Adam reflects on the life of trading giant…

While Adam Sarhan is watching for a healthy pullback after the explosive growth of the recent rally, some A.M.P.D. traders have asked whether it is too late to take long positions in this current trading window. Adam points out important considerations for late-rally buying and describes his personal brand of “risk-adjusted optimism.”

After big gains in the Nasdaq and the QQQ, A.M.P.D. traders were watching for these indices to pull back and digest the big move. Instead, we’re witnessing a sideways consolidation with very narrow price action, which Adam says is a very bullish sign.

The new rally attempt saw a shallow consolidation on Thursday followed by a big up day on Friday. Adam Sarhan says the technicals look bullish in multiple time frames, and he’s seeing lots of stocks forming bullish handles.

Adam Sarhan says dovish news from the treasury and the fed along with a softening jobs report are “bullish catalysts” that are changing the market conditions. Last week the QQQ saw two follow-through days in a row, and now Adam is watching for a consolidation as he takes a more offensive trading posture.

With macroeconomic headwinds and bearish signs, the market has entered a volatile period. Adam Sarhan says most A.M.P.D. traders are in cash and on the sidelines — but they are paying attention to market conditions so they know when to get back into the action. Waiting is watching.

Heavy selling erased the gains made during the recent rally attempt and then some. Most A.M.P.D. traders have been stopped out of their long positions, and Adam explains the tactic of preserving mental and physical capital and waiting for the next rally attempt — which may take a while given current market conditions.

Last week in the market, two days of heavy selling — distribution days, Adam calls them — threatened to end the recent rally attempt. Adam, however, remains cautiously optimistic but warns it is critical to know when to switch from offense to defense.