Weekly Market Prep Jan 20‑23: Index Action, Sector Leaders, ETFs and Trade Setups

Overview

The video reviews market activity from Jan 20‑23, highlights index behavior, top‑performing liquid stocks, sector‑specific ETFs, and outlines long and short trade ideas for the coming week. It also mentions the market holiday for Martin Luther King Jr. Day and promotes the Market Pulse Discord for live market commentary.

Index Analysis

• NASDAQ: Experienced a gap‑up, sold into a resistance gap, then pulled back to a support gap. Closed below the 5‑ and 10‑day MAs but stayed above the 20‑day MA. Volatility is contracting; intraday swings suggest a possible downside break.
• S&P 500: Down 4% for the week, forming a wedge pattern with higher lows and higher highs. Still above the 20‑day MA; a break below would confirm a downside move.
• Russell 2000 (IWO – growth segment): Hit a new all‑time closing high, up 2% weekly. Broke above the 50‑day MA after a weak Dec 31 close and is now in a strong uptrend, though a pullback could rotate money back into mega‑cap tech.
• ARK Innovation (ARKK): Building higher lows/highs; a pullback to the 10‑day MA on low volume was noted.

Crypto Market

Bitcoin and Ethereum are both in an uptrend, aligning higher highs and higher lows, and are tightening around the 5‑, 10‑, 20‑, and 50‑day EMAs. Both remain below their 200‑day MAs, indicating a medium‑term risk‑on bias.

Liquid Leaders (Top‑Performing Stocks)

• PL: Up 26.7% weekly, peaked at 3090, showing strong momentum but needs to stay above the 5‑day MA.
• KTOS: +15% after a Dec 31 shake‑out; aerospace & defense theme.
• RKLB: Space‑related, +13.5% weekly.
• WDC, SNDK, MU: Memory and semiconductor stocks surfing the 5‑day MA; SNDK is the strongest, MU is catching up.
• ASML, LRCX, Google (GOOG): Mixed performance; Google pulled back to the 10‑day MA.

Industry ETFs Review

• UFO (Space): Strong uptrend, no close below 5‑day MA.
• Blockchain (BLCN): +6.6% weekly, crypto‑related data‑center exposure.
• XME (Metals & Mining), NLR (Nuclear), GDX (Gold Miners): All near all‑time highs, riding the 5‑day MA.
• ARKG (Genomics), ARKQ (Robotics): New highs, risk‑on signals.
• XLP (Consumer Staples): Massive move through multiple MAs, now consolidating.
• TAN (Solar): Choppy, holding 5‑day MA.
• SMH (Semiconductors), XLF (Financials): Key defensive themes; holding above key MAs.
• XLE (Energy), ITB (Homebuilders), XLB (Basic Materials), XRT (Retail), IYZ (Telecom), IYT (Transportation): Generally above 5‑day MA, showing stability.
• PEJ (Leisure/Entertainment), XBI (Biotech), KWE (Chinese Internet), CYBER (Cybersecurity): Mixed to weak; many below 200‑day MA, indicating caution.

Positioning Data

• Active investors’ exposure index slipped from 97.7% to 96.0% (‑1.7%). Still above the 95% threshold, meaning most capital is already deployed.
• Speculators remain heavily long the NASDAQ, slightly less so on the S&P 500. Russell 2000 positioning moved from net‑short to neutral‑to‑long, suggesting a possible pullback.

Long Trade Setups

1. Alibaba (BABA) – Look for an under‑cut of the 10‑day EMA, then a reclaim of the daily VWAP. Stop below the day’s low.
2. BU – Similar to BABA but less liquid; entry on a retest of the 10‑day EMA.
3. FUTU – Target a gap‑up or a break above the 50‑day MA; stop under the 50‑day.
4. QBTS – Under‑cut and reclaim of the 20‑day MA or daily VWAP; stop under Wednesday’s low.
5. ALD – Watch for a pullback to the 10‑day EMA; stop 2‑3% below entry.
6. AAB – Look for a pullback to the 10‑day EMA around the 174‑level; stop under the 20‑day.
7. Open Door (OPND) – Momentum‑driven; entry on a gap‑up into the 50‑day zone, stop at 10‑day/20‑day MAs.
8. Dutch Bros (Brew) – Base building; entry on a gap‑up breaking Friday’s high, stop at the day’s low.
9. RR (Roll‑Royce?) – Gap‑up and push through $4; stop at low of the day.

Short Trade Setups

• Palantir (PLTR) – After an ugly close and gap‑up, look for a break below the 10‑day MA; stop at the 50‑day.
• CIEN – Short on a break below the resistance gap; stop above the gap high.
• HIMX – Short on a gap‑up to red candle; stop at the 5‑day MA.
• BBAI – If price falls through the 20‑day/50‑day MAs, short with stop near the resistance gap.
• QBT – Weakest quantum; short on a break below the 10‑day EMA; stop 3‑4% above entry.
• Lemonade (LMND) – Short on a break below the 20‑day after a failed high; stop at Friday’s high.
• Silver & Platinum – Short on parabolic moves if momentum wanes; use tight paper‑cut loss discipline.

Earnings Calendar (Key Dates)

• Tuesday: Banks, home‑builders, TripleM before market open; Netflix after close (stage‑4 decline); Intel, GE.
• Wednesday‑Friday: Additional earnings across sectors (not listed in detail).

Outlook

• Market remains sideways with tight ranges; a decisive break of key support/resistance gaps will set the direction for the week.
• Mega‑cap tech exposure is cautioned; focus on sector leaders in aerospace, defense, memory, and crypto‑related assets.
• Watch moving‑average crossovers (5‑, 10‑, 20‑day) for entry/exit signals.
• Keep an eye on positioning data; high overall exposure limits upside potential unless new capital rotates in.

Bottom Line

The market is in a consolidation phase with many leaders holding above short‑term moving averages. Traders should prioritize stocks and ETFs that remain over the 5‑day MA, use gap‑up or under‑cut/reclaim patterns for entries, and protect positions with stops at the next lower moving average or recent low.

The market is currently in a tight, sideways consolidation; the next clear break of key support or resistance gaps—especially on the 5‑day and 10‑day moving averages—will determine whether we see a risk‑on rally in tech and crypto or a shift toward defensive sectors and short‑term pullbacks.