The Big Question: Dead Cat Bounce or New Uptrend
Hi everyone,
I hope you are having a great Friday! In this post I’ll concisely share my thoughts on today’s action.
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Now let’s dive in ↓
Market Action
The QQQ Gapped up, pushed higher into the gap up and close to the declining 21ema. Then we failed and ultimately closed near lows.
The IWO showed similar action, reversing yesterdays positive move
Volume
Volume was lower on the NYSE and higher on the Nasdaq.
Trends ( Based on QQQ)
Shortest - 5 Day SMA - Mixed - Barely Above increasing
Short-term - 21 ema - Down - Below Declining
Intermediate term - 50 sma - Down- Below Declining
Longterm - 200 sma - Up - Above Rising
Group/Themes Action
Energy names continued to show distribution. most names gapped up but closed poorly.
Here’s a Daily Group Performance chart from TraderLion:
Key Stocks in Deepvue
TSLA is up against the 21 ema and 50 sma.
NVDA against the 21 ema
PLTR poor close, ideally forms a range above 50 sma , confirms higher
DUOL broke out, but weak close
RIVN better close than most. needs a pause
Market Thoughts
The close left a lot to be desired. We are at a make or break point that will determine if this is a deadcat bounce or the start of a new upcycle. A few days of range building would be constructive.
The routine remains the same. Track RS, potential leaders holding and shaping up so you are ready when the stocks tell you they are ready.
What do you think? Dead cat bounce? Answer in the comments.
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Cheers!
Richard
I’m actually a little surprised that the market hasn’t been even worse than it has been is considering the UAW strike and the shut down. I get the feeling that so much negative is priced in at this point that while there is risk it’s not nearly as much risk as a month ago, I look back at the 2019 government shut down from the day. The government shut down to the day it reopened the market went pretty much straight up but one thing I’ve learned on this journey, (I hate that word lol)
Is that when it comes to trading only price matters. Not our feelings.
For longer term money, different story.
Hi Richard, as always thanks for all of this great content. It's much appreciated. Am no expert and the price is the real determinant but, thoughts are that the US budget impasse and the Oil price increases and related inflation won't go away quickly. So it's a meoouww from me. Poor kitty.