In this post, I\u2019ll focus on setups that I\u2019m monitoring for both long and short positions. With a chart and short write-up, this is a quick way to scan and plan potential trades.<\/p>\n
\ud83d\udce2Before jumping into today\u2019s chart report, I\u2019m preparing to launch a new premium\u00a0feature:<\/p>\n
The Hub goes live on 10\/28<\/em>, and you can read all the details of what\u2019s included here<\/a> (plus several new features).<\/p>\n If you enjoy Mosaic Chart Alerts, then you\u2019re going to love the\u00a0Hub!<\/strong><\/p>\n As investors digest recent labor market and inflation data, the outlook for the magnitude and pace of interest rate cuts by the Federal Reserve looks uncertain<\/strong>. But instead guessing where short-term rates are going, investors should be assessing the earnings outlook<\/strong>. That\u2019s because once the Fed starts an easing cycle, the ultimate path of the S&P 500 depends on the economy avoiding recession and the ensuing impact on corporate earnings<\/strong>. With the third quarter earnings season underway, projections show earnings growth broadening beyond the \u201cMagnificent 7\u201d<\/strong>. That\u2019s especially important for the average stock, where ongoing earnings growth is need to support the rally. The chart below shows year-over-year net income growth for the Mag 7 (black line) and the remaining 493 companies (yellow line) in the S&P 500. You can see that earnings growth among the average stock is inflecting higher, and projected to catchup with the Mag 7 into next\u00a0year<\/strong>.<\/p>\n Those projections for better earnings across the average stock depends on a growing economy. And the economic outlook is being supported by an expansion in breakouts across cyclical sectors sensitive to activity<\/strong>. I recently noted the setup in the KBE bank sector exchange-traded fund (ETF). KBE is now breaking out above a key resistance level as I noted here<\/a>. But it doesn\u2019t stop there. The past week is seeing breakouts from sectors like transports as well as mid- and small-cap stocks that are more sensitive to developments with the domestic economy<\/strong> (relative to large-caps that on average receive a large share of revenues from international sources). The weekly chart below shows the IYT transportation ETF. Transports peaked back in 2021, and has since tested resistance at the $70 level several times. Over the past week, price is building on a breakout over that level<\/strong> and comes as the weekly MACD is in the early stages of turning higher from the zero\u00a0line.<\/p>\n While the prospect for election cycle volatility remains, it\u2019s hard to be anything but bullish on the longer-term outlook when cyclical sectors are breaking out from lengthy consolidation patterns<\/strong>. The move higher in mid- and small-caps is also starting to erase the recent negative breadth condition<\/strong>, where short-term breadth was lagging the price action in the major indexes. For this week, I\u2019m removing CYBR from watch as the stock holds above its breakout level. I also have a new addition to the watchlist.<\/p>\n Keep reading below for all the\u00a0updates\u2026<\/p>\n OPXS<\/strong><\/p>\n Peaked near the $8.50 level in May and setting up in a new consolidation pattern. Series of smaller pullbacks following a test of resistance on four occasions. Would like to see a MACD reset at zero before a move over\u00a0$8.50.<\/p>\n TSM<\/strong><\/p>\n Consolidating the prior uptrend since peaking in July around $190. Making a series of smaller pullbacks as price is now testing resistance again at $190. Recent MACD reset at the zero line while the relative strength (RS) line remains near the high. Watching for a breakout over\u00a0$195.<\/p>\n OSCR<\/strong><\/p>\n IPO from 2021 that\u2019s recently testing resistance around the $23 level. Making a smaller pullback off that level, but price moving lower than ideal. Will keep on watch as long as support at $17 holds. Watching for a move over\u00a0$24.<\/p>\n TPH<\/strong><\/p>\n After rallying to the $47 level in July, the stock has been consolidating gains. Recent series of smaller pullbacks off the $47 resistance level, while the RS line is holding near the high. I\u2019m watching for a breakout over $47 on higher volume with confirmation by the RS\u00a0line.<\/p>\n SHAK<\/strong><\/p>\n Peaked at the $110 level back March, and creating a new basing pattern since then. Starting to make a series of higher lows following the pullback into July, with a recent MACD reset at zero just below price resistance. Watching for a move over\u00a0$110.<\/p>\n WING<\/strong><\/p>\n Peaked around $430 back in June, and recently retesting that level again. Wanting to see one more smaller pullback that creates a MACD hook before trying to breakout. But price should not drop below $360 in the pattern. Looking for confirmation by the RS line on a move over\u00a0$430.<\/p>\n CCS<\/strong><\/p>\n Keeping on watch but following a new pattern. After moving over the $90 level, the stock back tested that area as support while creating a new basing pattern. Making a series of higher lows with resistance at $108. Watching for a breakout over that\u00a0level.<\/p>\n FG<\/strong><\/p>\n Broke out of a base back in November and rallied to the $48 area. Consolidating gains since the start of the year and recently rallying back toward $48. Want to see price hold support at the $35 level on any pullback.<\/p>\n F<\/strong><\/p>\n Rallying off a test of support at the $10 level. That reset the MACD below the zero line, while the RS line has stayed near the lows. Price now making a bearish flag pattern, with support at the $10.50 area. Watching for a break below the flag with confirmation by the RS line at new\u00a0lows.<\/p>\n I trade chart breakouts based on the daily chart for long positions. And for price triggers on long setups, I tend to wait until the last half hour of trading to add a position. I find that emotional money trades the open, and smart money trades the close. If it looks like a stock is breaking out, I don\u2019t want a \u201chead fake\u201d in the morning followed by a pullback later in the\u00a0day.I also use the RS line as a breakout filter. I find this improves the quality of the price signal and helps prevent false breakouts. So if price is moving out of a chart pattern, I want to see the RS line (the green line in the bottom panel of my charts) at new 52-week highs. Conversely, I prefer an RS line making new 52-week lows for short\u00a0setups.Also for long positions, I use the 21-day exponential moving average (EMA) as a stop. If in the last half hour of trading it looks like a position will close under the 21-day EMA, I\u2019m usually selling whether it\u2019s to take a loss or book a\u00a0profit.For short (or put) positions, I trade off a four-hour chart instead of a daily. Why? There\u2019s a saying that stocks go up on an escalator and down on an elevator. Once a profitable trade starts to become oversold on the four-hour MACD, I start to take gains. Nothing like a short-covering rally to see your gains evaporate quickly, so I\u2019m more proactive taking profits on short positions. I also use a 21-period EMA on the four-hour chart as a stop. If there is a close above the 21-period EMA, I tend to cover my\u00a0short.<\/p>\n For updated charts, market analysis, and other trade ideas, you can visit me here: <\/strong>www.mosaicassetco.com<\/strong><\/a><\/p>\n Disclaimer: these are not recommendations and just my thoughts and opinions\u2026do your own due diligence! I may hold a position in the securities mentioned in this\u00a0post.<\/em><\/p>\n S&P 500: Broadening earnings growth can support the rally.<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" In this post, I\u2019ll focus on setups that I\u2019m monitoring for both long and short positions. With a chart and short write-up, this is a quick way to scan and plan potential trades. \ud83d\udce2Before jumping into today\u2019s chart report, I\u2019m preparing to launch a new premium\u00a0feature: Mosaic Traders\u00a0Hub The Hub goes live on 10\/28, and […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-15561","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/15561"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15561"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/15561\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Stock Market\u00a0Update<\/h3>\n
Long Trade\u00a0Setups<\/h3>\n
Short Trade\u00a0Setups<\/h3>\n
Rules of the\u00a0Game<\/h3>\n