Tues., 8/4 | We Just Added 4 New Leaders. Here's What's Next.
Broad participation yesterday. We came off the bench and added four leaders: NBIS, SNOW, CRWD, HPE. Still leaning defensive, but the market gave us enough to put cash back to work.
REGIME
MARKET REGIME: RED/DEFENSIVE, but improving
QQQ cleared its 21-EMA yesterday.
The next test for the Qs will be the confluence zone around ~714-715 where the down trendline and the 50-day meet.
We still need a follow-through day to get aggressive.
What a day yesterday was, and it mattered. Not one or two names but the whole tape leaned green. We haven’t seen a risk-on rally like that in weeks. That’s the kind of action that lets us get incrementally more positive and start putting money to work, one name at a time.
Speculative themes all moved up together: Uranium URA 0.00%↑ , Solar TAN 0.00%↑ , Software IGV 0.00%↑ , ARKK 0.00%↑ , Copper Miners COPX 0.00%↑ , Silver Miners SIL 0.00%↑ , Gold GDX 0.00%↑ , Industrials XLI 0.00%↑ , Technology XLK 0.00%↑.
We saw the Magnificent 7 MAGS 0.00%↑, have a +2% day, and hold above all key moving averages.
What I find most interesting is that Semiconductors barely participated & was a notable laggard. I assume traders are waiting for AMD & ALAB earnings tonight. Software led, and cybersecurity gave us the strongest stock on the tape in CRWD.
That was enough to start buying again. Not enough to turn fully bullish. To be clear, conditions aren’t optimal. We’re running straight into that resistance overhead and we still need a Follow-Through Day. The market went from bouncing to having to prove itself almost overnight, and a lot of the proof depends on the one thing nobody can predict: earnings. AMD, HUT and ALAB today, more all week. That’s why we’re conservative.
If the follow-through comes, we add exposure one leader at a time. If it doesn’t, these positions prove themselves first.
THE RTL BOOK | 8/3 RECAP
THE BOOK, Tuesday morning.
CRWD | +4.7% gain | ER 9/1
The leading cybersecurity stock and one of the largest holdings in CIBR and HACK. Bought 189.70, added through the day high at 197.13. The stop has been raised twice and the trade now risks roughly breakeven while sitting at +2.4R.
Everyone says it’s expensive. Every real leader I’ve ever owned was expensive. Nothing to do here except keep raising the stop.
NBIS | +5.3% gain | ER 8/12
Trade of the day, and it all started with a 7% gap down at the open that got reversed. I bought the 21-day reclaim; 199 was the line that mattered. The stop got raised twice and now sits above my entry.
Now the trade cannot be a loss. That’s the whole system in one line. I’ll decide before earnings on 8/12 if we want to hold into the print.
SNOW | +0.2% gain | ER 8/26
Did nothing wrong. Bought the breakout today, it retested the level and held it, closed up 4.9% on the day and flat to my entry. Cleanest chart in software right now.
If yesterday’s follow-through confirms, this is exactly the kind of name that should lead it.
HPE | (−0.3%) | half size | ER 9/2
Half size here. The first breakout attempt failed on light volume, so I wasn't interested until real volume showed up yesterday afternoon. AMD reports tonight, which matters for the entire AI infrastructure trade.
If HPE holds after the print, I'll likely complete the position.
WHAT WE’RE WATCHING TODAY
A Follow-Through Day (1%+ on rising volume) along with a recapture of the QQQ’s downtrend line and the 50-day.
DELL | Seeing strength with HPE. Reclaimed its 10/21-day Monday and closed 429.23, below Friday’s high. Through it on real volume and it’s potentially the next add.
GDX | The rotation idea from Friday, 76.05 vs the 76.91 trigger. Needs the 10/21-day bullish cross and volume on the break.
RNG | Strong momentum, thinly traded. Watching 59.10.
FTNT | Cleared 162.70 Monday but volume never confirmed, so we passed. Want to see participation here before adding.
STX | Still 7% below its 890.50 level. Needs a few more days.
NEXT
The follow-through day ideally today but certainty this week. QQQ up 1%+ on volume higher than yesterday. That’s the green light to get aggressive.
The QQQ reclaims the ~714 confluence zone (down trendline + 50-day).
Stops honored, no exceptions. NBIS rides risk-free into 8/12; CRWD, SNOW, HPE work or they don’t, and the stops/charts decide, not me.
If the follow-through comes, you’ll hear it from me the minute it does. If it doesn’t, we hold what we’ve got and stay patient. Either way, the levels are set and the risk is known.
See you in the chat.
— Nick