Bridging indices and equities

One of the things that we like to do when we’re looking at the index futures is to look at the names within the futures contracts, Gang.

And that doesn’t necessarily mean looking at the individual stocks, for example within the QQQ right? Because that would be reflective of what we’re looking at in the NASDAQ.

So sometimes we will take a look at it from the sector level, like this…

STEP ONE: Strength in the NASDAQ

Now clearly we’ve seen strength in the NASDAQ: the top 11 heaviest weighted names are all heading higher in what I call the ‘double green markets,’ the 8 is above the 13, the 13 is above the 21, and price action is above the 34 EMA high close and low.

But as I said earlier, Gang there’s another way to take a crack at this market…

Looking at the particular sectors within the NASDAQ.

STEP TWO: Dollar General

That of course is tech — but also the communications and discretionary sectors. Now this next part is important, so then as we continue to see opportunities to play, not only on pullbacks in the sector, but also in those individual stocks when they present pullbacks.

And I feel like this is very much in line with what I would look at in terms of being a futures trader… Like looking at Dollar General in the NASDAQ.

Now you might be saying, “Dollar General? Really Ragh?”

But let me walk you through the setup, and you’ll see what I’m talking about. This about it this way…

NQ plus the discretionary ETF (XLY), then to a top 10 (top 11 in this case) weighted name in Dollar General (DG)… then a pullback buy to the 34 EMA on the high — all things I mentioned at the beginning just with a different approach, Gang.

And that’s exactly what I mean when I say ‘crack open the index.’


But what about other sectors, with setups that haven’t taken off yet?

Well we’ve been bullish XLC, XLY, and tech for coming up on a month now, so let’s take a look at them to see if there’s some opportunities with pullbacks.

So in order to do that, what’s our criteria?

  • 8 above the 13
  • 13 above the 21
  • And price action above the 34 EMA high, low close

One that fits that? EA, while not my favorite, we’ve pulled back before and this is actually my second buy in EA. One that’s not as promising? Netflix. Simply put, there are much better opportunities out there that fit the criteria.

Maybe take a look at Google…

If Google pulls back to the 21 exponential moving average, I’m game. What about you?

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Want actionable trades you can play today? Join Raghee’s “Countdown Trader” E-Letter for a step-by-step breakdown from a large market idea to a direct setup.

We will never sell your information to any third parties.

Free Downloads

Raghee's "ABCD Macro Cycle"
Learn, understand, and trade the 4 factors of economic cycles that every trader should know.

GRaB Candles Indicator

Identify not only the trend but also the sentiment and momentum in the market on any charted time frame.

TradeStation | ThinkorSwim

Darvas 2.0 Indicator

Darvas 2.0 draws a box when a new high or new low occurs.

TradeStation | ThinkorSwim

Propulsion Dots Indicator

A dynamic indicator based on the comparison of 2 EMAs in the form of buy and sell dots.

TradeStation | ThinkorSwim