I hope some of you faded that gap on Friday morning. That gap & crap (trap) was a classic expiration day move. Things looked so good right after the open but the market was also very extended at that time. I’m seeing a lot of bearish candlesticks made at & above the upper Bollinger Band on individual stocks. So there are some newly underwater bulls out there which may see a bit of pain this week. Given the bearish candles on Friday and the fact that the indices have short term overbought stochastic readings I think a pullback is imminent.
Here’s a chart of QQQQ. Friday morning I talked about it potentially being pinned to 40 and that’s how it played out after the opening gap.
Update: The note on stochastic below should say “overbought and close to a sell signal not a buy signal” (Thanks Duru)
The Nasdaq looks a lot like the Cubes. I won’t be surprised to see it back under its 200-day moving average this week. If I could make the market do my bidding I’d bring it right back to the blue trendline before pushing it higher again.
The S&P 500 is just a hair away from the May high but it’s also extended. I think it needs a little bit of a pullback / consolidation to build up enough power to break that old high.
No changes.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Lat | Up | Lat |
| Intermediate | Up | Up | Up |
| Short-term | Up | Up | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
