Using the S&P 500 and Nasdaq 100 futures as examples, let’s bring the US market correction up to date.
Monday played out to one option we had noted, which would be for a Monday morning swoosh down under pressure of margin calls and chart breakdowns, before a potential in-day reversal. We noted that if it did not reverse, bear signals would be in place (as if enough of them are not already).
It is not good that both of these indexes are below the SMA 200 and that will need to be remedied soon or it is going to become a heavy signal.
ES hammered back to the underside of the SMA 200 and this morning, not surprisingly, is backing off again. As yet, it is at the critical higher low to the October low, after the whipsaw below it and reversal.
NQ made a lower low to October and that is not good. It’s a bear signal. But it is oversold and did hold lateral support before also hammering back upward. A final nail in NQ’s coffin could be a drop below yesterday’s low that fails to reverse. But as yet, the bulls are still alive.
Just a little play-by-play calling of the daily charts for your Tuesday morning.
