The Market Closes Strong in The Context of a Downtrend. Short Covering?
Hi everyone,
I hope you are having a great Monday!
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 rallied after the gap down, and closed strongly with many stocks following suit. You can see we are at a key level looking to the left.
Short term there is still area to run into the gap and declining MAs. This is in the context of an overall downcycle.
The IWO is similar but the downtrend is stronger
Volume
Volume was lower on both the NYSE and Nasdaq.
Trends ( Based on QQQ)
Shortest - 5 Day SMA - Down - Below Declining
Short-term - 21 ema - Down - Below Declining
Intermediate term - 50 sma - Down- Below Declining
Longterm - 200 sma - Up - Above Rising
Group/Themes Action
Oil and Gas names acted quite well. Uranium stocks also stayed strong. The software names also bounced along with growth stocks at large.
Here’s a Daily Group Performance chart from TraderLion:
Key Stocks in Deepvue
TSLA nice upside reversal here again in the context of the short term downtrend.
NVDA not super convincing move here even with the strong action in the QQQ
CCJ continues to trend. uranium stocks are holding up very well. It’s extended from the last significant base.
VRT holding up better than most but not the best close
UBER double inside days. which way does it resolve
Market Thoughts
One up day does not automatically put us back into an uptrend. Fast day/swing traders can play bounces and/or look for shorting spots if they fail.
Keep running your screens and watching for a clear shift from the downcycle to an upcycle.
What are your thoughts on today’s action? (Leave a comment below)
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Cheers!
Richard