All Too Predictable

The markets are still in short-term downtrends, but this morning’s gap down on the China news was a setup. I sold no longs (and also covered no shorts) but added one long item on this morning’s weakness. The market was set up to shake ’em out and snap back upward because that’s what so often happens with inflammatory news events.

We’re back in a waiting place of sorts, with massive up and down whipsaws. Fun, eh?

Per this morning’s pre-market NFTRH update when the Dow was down a cool 470 points…

But if like me you are waiting for the market to either get the next bounce going or drop far enough to conclusively establish lower lows and or break support (thus establishing intermediate downtrends), then this morning continues to be more of the same.

That is because while some people have predicted that this is a bear trend or bear market in the making, the method I’ve used and written about is to have a vast majority of safe income-paying cash equivalents until technical confirmation comes in. Unfortunately, there is no change whatsoever that can be assigned by this morning’s action. The trends remain as they have been. It’s just more volatility.

In the US, the current pre-market readings (Dow -470, SPX -38 & NDX -112) would result as follows…

  • drop the Dow to 23,563, which is not a new low and is above the SMA 200 (23,436)

  • drop SPX to 2576, which is not a new low but does drop below the SMA 200 (2590)

  • drop NDX to 6346, which is not a new low and is well above the SMA 200 (6274)

In not making new lows on the hype and reversing the market did not go bullish. But nor has it gone bearish yet. Meanwhile, Tech bounced hard after I’d been buying QQQ on the hard downs since making this post…

Here’s Who is Not in Trouble: QQQ

For another day at least QQQ respected its intact higher low.

Right now for me it’s all just hanging around, staying balanced, playing a little but waiting for the bigger plan to engage as T Bills pay better and better income. The first real bounce to short into – if applicable – has not happened yet. And QQQ has not even had a breakdown yet.

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