Hello Everyone,
Quick Notes: Following yesterday's doji candles, the SPX/QQQ opened with a downside gap and closed near with bearish engulfing candles near their lows. As we surmised after the first leg down last week, we favored a lower high forming on the bounce to be followed by another push down. This coincided with a bearish cross on the SPX/QQQ daily ribbons and a bearish pinch from underneath on the failed bounce. The SPX/QQQ bounces stalled below their respective 20 day MAs (which were also exhibiting a bearish 20/50 MA squeeze). Today the QQQ already made a lower low with rising rates impacting the technology sector the most. The SPX still remains above it's previous as it tagged it's lower Bollinger Band today. Outside of energy sectors, there was no where to hide on the long side today.
While small caps (IWM) had a decent day on Monday, we saw all those gains wiped out today with price falling back down near the 50 day MA. Perhaps we see some rotation over time into some small cap value names but that was not the case today. Continue to trade what's in front of you first and foremost. Upon a quick review, I'm not seeing many objective setups so I will avoid forcing trades at this time. Continue to monitor the trading community for potential new ideas when spotted.
Please take a moment to look at the trade ideas.
