With headline risk recently heating up, the SPX under its 50-day MA and the IWM under its 200-day MA things seem a bit murkier than they have in our previous quick stanp-back corrections that began in 2013. Furthermore, the impressive streak the European markets have had, notably the Germany’s Dax index, ended at the end of July and is currently sitting below its 200-day MA. European weakness isn’t necessary a precursor to what will happen in the US, but it is worth noting the change in character.
For now the QQQ is holding above its 50-day MA and seeing that strength continue next week will bode well for the confidence of the Bulls. Also, considering we are still oversold on some metrics the bounce that materialized on Friday could very well have much more room to run even if we have not found a short-term bottom yet.
20-day highs still at oversold levels:
20-day lows, staged a bit of a comeback, but back to oversold levels: 
Upon any weakness next week it would be good to see SPY hold the 192 area, which is about half of Friday’s candle and also where there is a high number of puts for OPEX. 
Should this bounce have legs, I see many set-ups that look ripe for large upside moves or resumption of their longer-term uptrends – particularly in the bio sector which can often sport huge bullish candles. Next week should offer ample opportunity to take advantage of big moves in a short period of time which has been my focus recently.
Good luck next week!
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Back to Your Regular Scheduled Bull Market Or?
With headline risk recently heating up, the SPX under its 50-day MA and the IWM under its 200-day MA things seem a bit murkier than they have in our previous quick stanp-back corrections that began in 2013. Furthermore, the impressive streak the European markets have had, notably the Germany’s Dax index, ended at the end of July and is currently sitting below its 200-day MA. European weakness isn’t necessary a precursor to what will happen in the US, but it is worth noting the change in character.
For now the QQQ is holding above its 50-day MA and seeing that strength continue next week will bode well for the confidence of the Bulls. Also, considering we are still oversold on some metrics the bounce that materialized on Friday could very well have much more room to run even if we have not found a short-term bottom yet.
20-day highs still at oversold levels:
20-day lows, staged a bit of a comeback, but back to oversold levels:
Upon any weakness next week it would be good to see SPY hold the 192 area, which is about half of Friday’s candle and also where there is a high number of puts for OPEX.
Should this bounce have legs, I see many set-ups that look ripe for large upside moves or resumption of their longer-term uptrends – particularly in the bio sector which can often sport huge bullish candles. Next week should offer ample opportunity to take advantage of big moves in a short period of time which has been my focus recently.
Good luck next week!
Check out a subscription for trade ideas and more.
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