The Ps didn’t come unglued but they did end lower. This was enough to put them at multi-month lows. The Bowtie moving averages (10SMA/20EMA/30EMA) have begun to turn down. We could get a sell signal here soon. Signals off of all-time highs can be very significant. You might want to write that down. Email me if you need the pattern (or just buy Layman’s already!, LOL).
The other thing we can’t completely forget about is the fact that the Ps still have a bit of a double top look to them. See my July 17th column (https://www.davelandry.com/index.php/double-trouble-well-it-is-not-that-easy/) and recent webcasts for more on this.
Also, of course, the Ps are still below their recent range. The longer and further the market stays below this range, the tougher it will be for the market to get back through this range—See Friday’s column.
The Quack ended flat but still in the minus column. This action has it a multi-week lows. It has short-term resistance just above and short-term support just below. Obviously, it is important for this support to hold.
As I told my peeps Friday night, I look at few thousand charts and think, jeez, the market was weak. I then study the Rusty and think that you really have to look no further. It was down nearly ½%. It often does a good job representing. So, if you don’t have time to look at all those charts, make sure you at least check the Rusty.
Most everything I said about the Ps applies to the Rusty with the exception of the double top. It “overshot” its prior peak. See recent webcasts for more talk on this. Or, come to the next one on Thursday.
I have been concerned about the high fliers rolling over, worried that it could become a case of, “the bigger they are, the harder they fall.” With previously strong areas such as Biotech, Retail, Health Services continuing to side, it appears that this is playing out. We could see shorting opportunities in these types of stocks soon.
Yet again, Bonds banged out new lows. Stop me if you heard this before: it’s not the absolute rate that bothers me, it is the delta in rates. They need to stabilize-and soon. The spike in interest rates is really taking its toll on areas like Real Estate.
About the only area that looks like it has potential at this juncture is the recently mentioned Metals and Mining. They too were a little soft on Friday. Wait for new setups here before looking to take new action.
So what do we do? I’m proofing this column and realized that I really didn’t paint you a rosy picture. I’m sorry but I just call ‘em as I see ‘em. And right now, I don’t like what I see. Now’s not the time to rush out and buy unless the area(s) appears to be bottoming like the aforementioned M&Ms. You certainly don’t want to try to catch the falling knife on the previous high fliers with the hopes that they will resume their glory. They could actually provide shorting opportunities soon. So get ready to get ready here.
Futures are soft pre-market.
Best of luck with your trading today!
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