Yesterday SPX filled the gap we’ve had on radar for months. But there is another daily gap at 3330. Now that a bear market is likely in progress we can’t rule anything out.
I’ve been focused on the upper gap due to bleak sentiment and the possibility that the support just below it could be an area to spark a sentiment rally (and future shorting opportunity for those who would short). But I’d bet dollars to donuts the bear market will fill the lower gap sooner or later (recall that NFTRH 704 showed the 3400 +/- area as a strong support zone by weekly chart).
As for NDX, it too checks in with a downside gap. Unfortunately, NDX commensurate support to SPX’s 3400 is way down at 9600. That could be its ultimate bear market objective as well. Meanwhile, let’s see if a sentiment bounce can get going. My preference is rally now, suck ’em back in, and then next leg of the bear market later, likely into the stereotypical Q4 season of pain.
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I honestly wonder about a Q4 season of pain this year. I wouldn’t be surprised to see a September bottom and then a rally in October through year end to save the sentiment for Democrats in a mid-term election year.
Could be. But I am keeping the toxic political quagmire out of it. Feels to me like bounce to renew spirits and then the worst of the cyclical bear ensues. Sentiment is so beat up now. I don’t ascribe such power to these clowns in Washington.
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