STOCK MARKET UPDATE FOR 3/18/26

TLDR;

The speaker discusses the market's reaction to the FOMC meeting and Jerome Powell's comments, which were perceived as hawkish, leading to a market downturn. The analysis focuses on key levels like the 200-day moving average and oversold RSI conditions, outlining potential bounce scenarios and strategies for navigating the current market volatility. The speaker also highlights specific stocks showing relative strength and potential trading opportunities, while emphasizing the importance of managing risk and maintaining a balanced perspective in a challenging market environment.

• Market tanked after hawkish comments from Jerome Powell following the FOMC meeting.
• Focus on the 200-day moving average and oversold RSI for potential bounce scenarios.
• Emphasis on managing risk and avoiding emotional trading decisions in a volatile market.

Intro [0:00]

The speaker starts by acknowledging the market's reaction to the FOMC meeting, noting that Jerome Powell's statements were more hawkish than anticipated, leading to market declines. The speaker outlines the plan to analyze the current situation, focusing on the S&P 500 (SPY) and Nasdaq 100 (QQQ), and to discuss potential scenarios based on technical analysis, particularly around the 200-day moving average. The speaker clarifies that the discussion will focus on broad market movements rather than individual trade ideas.

Market Analysis and Key Indicators [1:18]

The speaker points out that the 200-day moving average is a critical level to watch. The daily Relative Strength Index (RSI) is nearing oversold territory, with the Dow Jones Industrial Average (DIA) already in oversold conditions for the second time. Historically, oversold RSI levels often limit downside potential and can signal a market bottom, especially when accompanied by divergence. The speaker notes that SPY, QQQ, IWM (Russell 2000), and DIA are all near their 200-day moving averages, with DIA already below it.

Historical Stats and Market Expectations [2:47]

The speaker discusses a historical stat where, since 1990, a specific VIX condition has always led to at least a 2.5% bounce off the low by the end of the week. While this pattern failed to play out recently, the speaker still anticipates a bounce, either from the 200-day moving average or after a brief dip below it. The expectation is for a 4-5% bounce, even in adverse market conditions. The speaker emphasizes the importance of patience and highlights that individual stocks showing strength can offer trading opportunities, regardless of the broader market trend.

Potential Scenarios and Trading Strategies [5:57]

The speaker outlines two potential scenarios: a bounce off the 200-day moving average or a drop below it followed by a bounce. The speaker notes that a 4-hour RSI reaching oversold territory typically leads to buyers stepping in, even below the 200-day moving average. Drawing from past examples, including a period in February, the speaker illustrates how oversold conditions can lead to multiple bounces, even in a worst-case scenario. The speaker advises to expect bounces in the current market environment and to avoid being overly bearish.

Individual Stock Analysis and Market Outlook [9:14]

The speaker discusses individual stock holdings, including Palantir, which is showing relative strength. The speaker mentions being frustrated with a particular stock (Rocket Lab), but emphasizes the importance of laughing at losses and not letting market events affect personal life. The speaker reiterates the two potential market scenarios and advises against being overly convinced of a straight move back to all-time highs. The speaker stresses the importance of waiting for confirmation signals, such as flipping the daily and weekly clouds green, before becoming overly bullish.

Historical Patterns and Trading Confidence [20:36]

The speaker references historical patterns, including the 2022 bear market and the COVID-19 crash, to illustrate how markets tend to bounce after falling below the 200-day moving average. The speaker expresses a personal intention to be a buyer if the market gets extended from the 200-day moving average, targeting a return to that level for profit-taking. The speaker emphasizes that markets move in zigzags and revert to the mean, advising viewers to avoid having a bias and to be aware of potential larger roll-overs indicated by the monthly MACD.

Specific Stocks to Watch [23:28]

The speaker identifies specific stocks showing strength, including Google (GOOG), Pfizer (PFE), and UMAC. For Google, the speaker is watching for a move above $3107, while for Pfizer, the speaker notes the tendency to pull back every other day, providing entry points. The speaker also discusses Rocket Lab, Iron, Intel (INTC), Tesla (TSLA) and GEV.

Final Thoughts and Disclaimer [25:58]

The speaker encourages viewers to maintain a positive attitude and not let the market control their emotions. The speaker reiterates the two potential market scenarios and highlights Nvidia as a stock to watch for oversold conditions, anticipating a 10% move over the coming weeks if it reaches a daily RSI of 37. The speaker concludes by reminding viewers that the purpose of the channel is to provide market research and analysis to save them time and effort.