Market Update Prop Reached, Rates Down
Nasdaq (QQQ) has reached the TD Propulsion downside target while still holding above the June lows.
Something to note is how Apple has not undercut a new low.
GOOGL was one of the tech downside leaders
Visa RSI now getting into the oversold region. We have seen some nice rallies off these levels in the past.
SPY across different indicators now completing aggressive TD Combo 13's and kissing the lower end of the Bollinger band
In short, it seems like the medium term downside is slightly open right now. I will continue to scale down ideas on the long side because the big picture setup is not working at the moment. We have to be cautious of the fact that 3200 SPX could happen. The reason I'm saying could, is because the bonds are telling a different story. While they are slowly holding form, new lows on the market should be met with buying pressure
The prior close was strong enough to warrant the idea that bonds have found a short-term bottom. While markets have generally moved on the principle of higher interest rates being bad, along with inflation etc, the fixed income markets are holding firm in the face of a higher than expected CPI print coupled with an interest rate hike. This is the biggest narrative to price divergence we have seen in a long time.
XLE continues to trade and trend lower since making a lower high, which should continue to help the bonds solidify a low.
A lot of tech leaders are still holding form, and I am playing higher time frame setups here. The aggressive buys against the daily 61.8% on the indices did not hold, but these weekly setups like DOCN for example have me still leaning to the upside
A nice proxy to help understand the possible turn in bonds would be the XLF/SPY ratio. We recently printed a 13 sequential and banks have been outperforming, but now look like idea short candidates
I'm looking at 107 on JPM as a short-term downside target
DAX has now reclaimed its higher time frame trend
S&P daily just held the 23.6%
Stay tuned in Discord for more updates.