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On Friday, we saw the S&P 500 dump nearly 2 and 1/2% we saw the Nasdaq drop an insane four almost five percent within a single day. Now, this has a lot of people concerned that there is a potential top in the market. What we're going to do is take a look at the S&P 500 and QQQ within our trading framework and then we're going to take a quick look at all of the mag seven stocks.
I want you guys to understand that first and foremost these pullbacks are normal and they happen. I mean, if we look at a daily timeframe for the S&P 500 this small pullback is really nothing considered to the massive wave of buying pressure that we have had in the past couple of months. Now, it doesn't mean that we can't hit a potential top.
The market will not go up forever. We all know that but as of right now, I want to start by saying that everything is still very bullish and if I had to bet my expectation is that price is going to bounce this week and going to bounce within the next couple of weeks and I do ultimately think that we're going to see a continued move up.
Now, let's start first with the S&P 500 as a whole. If we take a look at the S&P 500 we are in a bull cycle. Now, a bull cycle occurs very simply when the monthly BX is showing buying pressure and the 33 fair value band is green. As you can see, we only want to trade during these bull cycles. The backgrounds that you see are green indicate all of the bull cycles.
If there is no background that means that we were in a bear cycle at the time. So, this would have kept you out of that 2022 bear market and most importantly this would have kept you out of the 2020 market crash that happened for the S&P 500 due to COVID and even more importantly this would have kept you out of the 2008 financial crisis.
So, for everybody who's so worried about potential market crashes, this indicator and this strategy is literally for you. Would have kept you out of the dot-com bubble, the '08 financial crisis, 2022, 2020. Literally the biggest times that we've seen drawdowns in the market, this would have kept you out of it.
And you can see that right now, the S&P 500 is still in a bull cycle. Now, I will say that the accuracy, so if we're going to enter into a bull cycle, 56% of the time is when it occurs. So, we are still in this bull cycle. I do think the price is going to continue, and most of these bull cycles normally last about 12 months.
If you want to get access to both of the indicators for free and a masterclass course teaching you how to use these, the link to our bull cycle trading blueprint is down in the description. You get both the indicators completely for free, a full course teaching you how to use it, and it's no credit card required.
It's truly just our way of saying thank you and giving back to you for all of the support. Now, knowing this, we can see that the cycle is still bullish. And I want you to even understand, too, if we just look at this weekly chart, that there are plenty of times within bull cycles that the S&P 500 pulls back 2 to 3% in a single week and gets bought right back up.
If we take a look here on the week of Monday, the 6th of October, the S&P 500 drops in a week 2.6%. What happens? It gets bought up the very next week. Back here, we can see July 25th, we get a pullback of 2.8%. What happens? Price gets bought right back up. Here we have a 3-week period where the market drops 5%, gets bought right back up in a single week.
This is really why you see so many times people saying that if you miss some of the best trading days within a year or within a month, you're going to miss out on some of the craziest returns. Because after some of the biggest drops come some of the biggest rallies. Now, what we're going to do is actually move into a daily timeframe.
So, we were just on the weekly, we're looking at that macro buying pressure and that macro structure. What we're going to do now is go into the daily timeframe. We're going to throw up that 33 fair value band that we give you guys inside of that course, and I want you to take a notice that normally when price pulls back drastically, we bounce off of this level.
So, remember we talked about back in July of 2025, price drops 3%, boom, gets bought right back up off of that level. Price pulls back 2%, boom, gets bought right back off of that level. Every time we pull back into the support level, we bounce. You can even see here that in October of 2025, in a single day, the S&P 500 drops 3%, gets bought right back up.
Now, where we have to worry is when we start to like hold multiple sessions and multiple weeks under this level. This is where things start to get squirrely and where these big sell-offs can occur. So, if we look at this right now, this is just a retest into this support level. So, I think the S&P 500 and QQQ are going to bounce here, right?
SPY worst case, maybe down to 730 before a potential bounce. QQQ worst case, down to about 695 before a potential bounce. But, I do want to say, of course, it doesn't mean that this has to happen, but this would be considered a good support level and would be considered a reason to be a potential buyer for the S&P 500 as a whole.
Everything is still looking good about this. And even if we go out to the weekly timeframe, our short-term combined signal system indicator, which is what I run all of my trading strategies off of, this is still bullish, right? Still bullish as well. So, everything about this market is still bullish for the time being.
Now, what would change my mind here, right? Short-term, if that daily 33 fair value band, as we said before, starts to break and the weekly BX starts to break down, that would change my tune a bit. If this level breaks of like $730, then I'm worried we have a continued 5% move back down to $700. That's what worries me on a shorter-term timeframe.
What would really worry me is if that monthly BX trend or flips dark red again. So, as of right now, I'm still bullish. I'm expecting this market to get bought back up. With that said, let's take a look at some of these bigger stocks in the mag seven right now. Nvidia, I think this is just a buying opportunity, right?
If we remove all of our indicators, you can see that this moves in a very simple matter, normally multi-year long compressions followed by a massive breakout. We have this compression here in 2023 that leads to a massive breakout. This compression here that leads to a massive breakout. This compression here, I think is going to lead to a massive breakout.
You'll see our combined signal system indicator is currently long. 77% of the time when this is long, price is going to break out up to about $230 to $250. I think that price is going to bounce off of this support level, worst-case test $200, and then go for a breakout. So, in my personal opinion, of which we can always be wrong, I'm not right all the time, this is a dip buy opportunity.
I really like the way that Nvidia is looking. Another dip buy opportunity is Amazon. Amazon has been squeezing here for almost 2 years. Price is pulling back down into this previous resistance. Same situation. We are in a bull cycle. Buying pressure is still coming into this stock. I think that price bounces between $240 to $242.
I think ultimately we get a 6-month rally on Amazon. If we were to take a look at something like Netflix, I am still not bullish on Netflix. The reason for this, monthly BX is still dark red. 33 fair value band is still dark red. These are the principles we talk about in the bull cycle trading blueprint.
So, this is not quite bullish yet. There's a chance price bounces, but because my criteria is not met, I'm just not going to touch it. I want to be trading this type of market, not this type of market. So, once my criteria meets, I will look to trade Netflix. Same situation with Meta, right? Looking at Meta, I think that price is going to bounce off of 600, but once again, I don't do things based off of how I think or how I feel.
I do things based off of my trading criteria. My trading criteria is not met yet. If price can sweep $700 and the monthly BX turns green or increases, then I will play that move up to 900. It does look like Meta is probably going to bottom, but just like Netflix, I'm going to sit out. Same situation with Microsoft.
Microsoft is not meeting criteria on the bigger time frame just yet. Looking at this weekly time frame, you can see that we are showing buying pressure. We are testing this 33 fair value band resistance, and while I did have short-term calls and I'm still holding them, that's based off of the daily time frame, the smaller time frame.
If Microsoft is going to flip bullish, we need to bounce off of this $400 level and move our way back up. I am holding calls on Microsoft because of the smaller time frame setup, but it's not quite in a bull cycle just yet. Now, the next one we're going to talk about is Tesla. For Tesla, I have just continued to sit out as I've said.
Looking at this, the monthly BX, yes, is increasing, but the 33 fair value band is still green. And so, I hope, right? My hope here is that we bounce and we make an inverted head and shoulders. My hope for everybody as long as that price bounces, we make an inverted head and shoulders, we have a massive liquidity zone here, and that we move our way up to 550.
But, once again, I don't trade based off of hope, right? I trade based off of my indicators. So, my hope is that this is an inverted head and shoulders, and then we break out. My fear, and what I'm trading based off of with my indicators, is that if this does not bounce here, it could continue to burn to 300.
And so, I just have to wait for my criteria. Once my criteria is met, I'll take the trade, I'll play the breakout. My hope is that Tesla bounces, but I need to wait for my criteria. Overall, guys, oh, and the last one, Google, right? Google, this is still looking good, still in a bull cycle. My expectation is price is probably going to bounce between 350 to 345.
I hope this video helped. Guys, thank you for all the support. Enjoy your weekend. Of course, we can always be wrong, but as of right now, everything is still meeting criteria and still looking fine. The link to our free courses are down in the description. The THD Bull Trading Cycle Blueprint will show you both those indicators, how to use them, the exact logic map, and how I instantly tell if a stock is bullish or bearish. Link's in the description. Enjoy your Sunday.
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