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Charts & Coffee for 10/1

Let's break out the charts with some nifty indicators and see where SPY, AMD, and TSLA might be going this week. 📈

Major Hayden
Major Hayden
6 min read
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Photo by Chris Lawton / Unsplash

Good morning! Grab your coffee and let's get started with a look at the only two things in the stock market that won't lie to you: price and volume. Both are on stock charts for free! 📈

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Nothing on this site constitutes financial advice of any kind.
All investments come with significant risks, including the loss of all capital. Please do your own research before investing, and never risk more than you are willing to lose. I hold no certifications or registrations with any financial entity.

Let's go!

Trading with logic, not emotion

I really enjoy the weekly videos from Ciovacco Capital because they take a data-driven, logical approach to examine where we are now and compare it to similar events of the past:

Here are the details I took away from this video after watching:

  • Chances of interest rates remaining steady (no hikes or cuts) through January are going up
  • We're looking at a 8% draw down on SPX so far
  • This pattern doesn't match up well to previous crisis moments where the market fell drastically
  • Crisis moments usually see the 10 month moving average cut through the 40 month moving average with a sharp angle
  • Corrections in a bull market usually see the 10 month moving average roll down to the 40 gradually and then start coming back up

Here are those moving averages from the video:

Changes to my charting

I've looked at ICT concepts several times over the years but I haven't done much with them because they're so cumbersome to track on charts. I found LuxAlgo (support this blog by using my affiliate link) and their Price Action Concepts indicator saves a lot of time. It's deeply configurable for your particular type of trading, too.

You'll see some LuxAlgo indicators on my charts here from time to time.

SPY

Let's start with a SPY daily chart since July. We bounced off a positive gamma zone (I got this from Tradytics earlier in the week) but then we made a fair value gap (FVG) on the 15 minute timeframe. That's where price action stopped on Friday.

There's a handy dashboard at the bottom right of the chart from LuxAlgo's indicator that shows SPY as bearish on all time frames. The oscillator at the bottom shows a potential for a bullish move, but there has not been much to confirm it so far.

If we're headed up: SPY really needs to break through the FVG just under $432.50 to get a run higher to around $437 where we have a gap from earlier in September. If we keep running through that gap, we have a bearish order block near $450.

If we're headed down: There's still that positive gamma exposure down there around $420, but we're focused on price and volume in this post! We have a bullish order block down around $405 that could be a base. $400 is a big psychological support level and we have some critical VWAPs from the COVID low/high in the $380's.

AMD

AMD had a good rally over $100 this week, but it stalled out on Friday. There was a bullish order block just above $100 and AMD crossed it, retested it, and moved higher on Friday. We also filled the $99 gap with significant volume as if it wasn't even there on the chart. These are strong bullish signs for me.

AMD turned bullish on the 15 minute and 1 hour time frames, but then the 15 minute turned bearish again on Friday. It looks like it's building out the right mechanics for a move higher but it's still unclear where it's going in the short term.

This chart makes it difficult to tell why AMD stopped falling at $96 and stopped rallying at $105, but check the next chart to see my theory.

On the four hour timeframe, there was a bearish liquidity grab Thursday morning right below a big positive gamma exposure level. In addition, if I bring over my gamma exposure levels from Tradytics, AMD followed them almost perfectly. Negative gamma exposure acts much like a magnet for price while positive gamma repels price action in both directions.

AMD 4h chart showing bearish liquidity grab
AMD 4h chart showing bearish liquidity grab Thursday morning

If we're headed higher: $105 seems to be a limiter for now based on gamma exposure as well as the liquidity grab. AMD has some bearish order blocks from $108-$112 and $116-$120. That area around $120 has been a challenge for AMD for months.

If we're headed lower: AMD still has a decent amount of negative gamma exposure around $95 that could be a magnet for price. There are two order blocks that run from $76-$86 where I would expect to see AMD get a bounce.

TSLA

I'm not sure what's easier: predicting the weather or predicting TSLA's price moves. 🤭 TSLA made a big doji candle on Friday after coming off the $240 level earlier in the week.

TSLA looks bullish on the 15 minute and 1 hour time frames, but that's about it. LuxAlgo's oscillator also suggests TSLA and AMD are in the same boat: the elements are there for a rally but the execution just isn't happening yet.

Note the bullish liquidity grab from Monday as a slew of orders came through near $240. This is usually a bullish sign but it may take time to develop.

If we're headed higher: TSLA has a small order block in the $270-$280 area that likely won't have a large impact on price. There are more order blocks above that level, but they're even smaller. $300 might be reachable but it's going to take some work to get there.

If we're headed lower: TSLA made higher lows off the $220 and $240 levels, so if it retests those, I would expect some support there. That $220 bounce from August came up on some serious volume. Below $220, there's an order block around $150-$160.

The biggest order block on the chart is from January 2023's pivot and it's massive (51% of the total order volume). That's way down around $110. TSLA has plenty of support levels between its current price and that level.

Final thoughts

TSLA and AMD both have a good potential for a rally as more and more technicals turn in their favor. However, if SPY can't find its way past $432, it may not matter. The overall market could keep sinking and take both of these equities with it.

My plan is to watch SPY's $420 level like a hawk. We tested it once last week and if we test it again, the results of that test will be really important. A break below doesn't leave us much to work with until $400-$410. That type of drop would be a 12.79% correction and we've only corrected 8% so far.

Losing $400 means we're likely relying on VWAPs from the COVID high/low in the $380's. That would be a 17% correction.

Good luck to everyone this week! ☘️

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Just a hobbyist trader trying to make sense out of the market.

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