Markets gapped down (0.88% in the SPY, 0.89% in the DIA, and 1.10% in the QQQ) at the open Monday. However, this was a bit of a bear trap as bulls immediately stepped in to rally all 3 major indices back up through the gap and into positive territory before 11 am. The market started a sideways grind at that point with a slightly bearish trend for a few hours. Then finally, the bulls stepped back in at 2:30 pm to drive us back to the highs of the day at 3:30 pm. This action leaves us with gap-down, white-bodied candles that, at this point, are engulfing the prior white candles.
With 30 minutes left in the day, 9 of the 10 sectors are green, with Healthcare (-0.89%) by far the biggest loser and Basic Materials (+2.04%) by far the most significant gaining sector. Meanwhile, about two-thirds of a percent of SPY, DIA, and QQQ are all up on the day. At the same time, the VXX is down almost 10% to 17.86, and T2122 has climbed but remains just on edge in the oversold territory at 20. 10-year bond yields pulled back from early highs to 3.49%, and Oil (WTI) has recovered from earlier lows to $85.40/barrel. All-in-all, just a bear trap day that maybe held support and tried to relieve some over-extension.
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