Freaky fast outlook (SPY, QQQ, IWM)

As we look at the week to come for the Freaky Fast Folio, I should first note that we are about 140% invested right now. The timing was right for that, but preferably I’d like to get off margin over the next few days. I won’t be actively seeking new positions to add, although I typically tend to find some good opportunities anyways. Instead, I will be shedding some of my positions or shares. Let’s start by looking at the market outlook.

We own 10 shares of the QQQ, the index representing the NASDAQ. The outlook for the QQQ is undeniably bullish. Let’s look at the weekly chart first.

You can see that the QQQ has broken out of an upper trendline dating back to August of 2018. A week ago Friday, it tested that support and bounced, resulting in the stellar week we saw this week. The chart suggests that we may be entering an extended growth phase of the QQQ, or that this will all end very badly for the bulls. We will adjust to the future as it happens, but at the moment there is absolutely zero reason to not be bullish.

In addition, we learned this week that the big technology companies in America are kicking ass and taking names. We learned that the semiconductor components of their products like AMD are doing the same. We can extrapolate that other leading companies like NVDA will likely report the same thing when their time comes.

Personally, I will be taking profits in my QQQ shares this week because there are much better ways to play this bullishness than through the index itself. I was frankly just in this because I needed to add a big position last week and the Market Maker keeps trying to drag the indexes down in overnight trading, and I like to taunt him into selling it to me lower than he wants to. All my index shares were bought late-night at a deep discount to what the market had traded at the previous day. $300 in the Qs is extremely likely in the weeks or months to come.

Check out the index on an hourly chart.

Look at all that early selling Friday morning. You know what that means? It means that actual living, breathing human beings learned that all of our best companies are kicking ass and taking names, and their response was, “I better sell.” It boggles the mind. If you have money that is being managed by someone who tells you to be happy with your 8% returns each year, that’s the kind of thinking you can expect. I recommend running your own money and thinking for yourself.

On to the SPYs.

As you can see, the S&P 500 has yet to regain new highs, although it certainly looks like it’s headed there. The daily chart of it is fantastic.

You can see the little line I made with my cursor at the swing high from June 8th. On that day, the SPY peaked, and it has acted as resistance going forward. We briefly broke above it for a couple days only to fall back below. There it received support from an upward moving 21-day ema line (the yellow) and the uptrend line (white) that I have drawn. Friday the SPY tried to break lower (which was absurd to begin with) but closed at the highs of the day, above that June 8th high. If we get an up day on Monday, that June 8th high, which had previously been resistance, will likely become support (or a short-term floor) for the index price.

I’d be fairly stunned if this doesn’t get to $340 soon. I own 8 shares of this and will also be selling them this week to raise money for more profitable usage going forward. But the setup is great.

Lastly, for good reason, is the IWM. The IWM is the small-cap index, and it is underperforming the rest of the market. Still, the set up is pretty bullish, and I actually have an options play on it in my retirement account, expecting a ride up towards $164 over the coming months.

Nothing horrible about this, but I’d expect continued underperformance until we see real reopening signs. That’s all I have on the markets, next up will be our current positions.

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