The Silver Lining in a Sea of Red


Hey Trader,

After wiping out 2 months of gains in 1 week, the market is finding Volume Profile support. I'm expecting a bit of a bounce here, if not a full reversal. 

We need to hold these levels in order to get that full reversal, otherwise we'll most likely take one leg lower to the point of control on SPY. The NYMO/NAMO index, widely used to predict violent market rallies in bearish conditions, is way oversold, so that could be the bulls’ golden ticket for an outrageous rally, to the tune of like 200 points in the S&P 500.

Note that this volume support we're hitting is a very small node, so think of it like a weaker branch on the tree. I'm not fully confident in this reversal, but it is pretty obvious to see that we're holding on so far so good here.

I'm excited that we're in earnings season and we can use my volume toys  for a playdate. Last week Closers predicted a sell off in NFLX, with some of us closing up 400%. Earnings is obviously a binary event, but I have a pretty good edge to take a confident shot. TSLA is reporting this week, along with GOOGL and oil giants XOM and CVX. You can bet your bottom that we'll be taking earnings related trades in these names. 

Of course, Closers understand this is a high-risk, high-reward play. But that's how you play earnings the big boy way. Another way we like to play earnings is in the aftermath, which serves up powerful moves that usually continue in the same direction. 

We'll cover that next week when we get more earnings wins under our belts. So far, the TSLA chart looks terrible. It made a volume profile and POC (point of control) breakdown, and continues to make bear flags that will hit those lower targets. I'm expecting TSLA to go lower. According to this, we're talking around 130...but my spidey senses are predicting it could drop much lower than that…to 120.

This Friday, April 26th, is our Free Friday Trade to Close show!

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Always be closing,

Olivia Voz and Mark Sebastian