The Market Gets Worse, Oversold?

Hi everyone,

I hope you are having a great Thursday!

In this post I’ll concisely share my thoughts on today’s action.

Be sure to leave a like on this article and subscribe so you don’t miss any future ones!

Now let’s dive in ↓

---

Market Action

The QQQ continued sharply lower. With two very negative days In a row after an already sharp decline, we may be a bit stretched in the short-term to the downside.

We are about 6% from the declining 50 sma.

This by no means say’s we have to rally but the odds increase of a snapback move so shorts likely have less reward/risk. If there is a gap down tomorrow I would not be surprised to see a R to G move.

However, remember that as bad things may look, they can always get worse. Oversold simply means there has been heavy selling which can always continue. Less is more right now.

The 200 sma test seems inevitable, and a likely spot for at least some consolidation.

The IWO continues the downtrend

Volume

Volume was higher on the NYSE and the 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

Distribution signs from most of the stocks on my watchlists.

Here’s a Daily Group Performance chart from TraderLion:

Key Stocks in Deepvue

PDD double inside

META gap down but decent close off lows

CRWD 50 day test on deck?

NVDA at lows

Market Thoughts

With the market oversold, continue monitoring for RS and working on your trading system. More active traders can look to pick their spots carefully if a reversal does occur.

Would Livermore be fishing? Either that or shorting starting 2 weeks ago.

What are your thoughts on today’s action? (Leave a comment below)

---

This post was brought to you by Deepvue Charts. My Daily Driver for Charting, Alerts, Watchlist Management, and more!

I hope you found this article helpful!

Here is what you can do to help make them possible and support my work.

1. Leave a like on this post below

2. Subscribe to Trading Engineered

Cheers!

Richard


P.S. We just released a new free resource: The Ultimate Screening Guide

This will help you find top stocks faster and speed up your routines.