Rare Up 2% Down 1% Settle in Nasdaq
Fed Kaplan and Covid Proving Too Much
What started out as another massive bull rally early on turned into a sea of red by the close led surprisingly by the NASDAQ which has been the stalwart upside leader, shunning any downside attempts at all. Well not today as we got a massive 2% up move followed by an even larger reversal to close over 450 points off its intraday high of 11058.50 and settle in at 10600 down some 237.25 points!
How rare of a move do you say, well it’s only happened one other time in history, on March 7th 2000
So this kind of rejection should rattle a few weak longs and with the SP500 also now back below the all important fib .786 rejection level of 3165 doesn’t bode well for the Bulls at this moment in time. Hey but wait, tomorrow could be up 1 or 2% yes it could and we wouldn’t be the least bit surprised. However, even with that we are going to key that 3165 level in the SP500 and we would rather use a test back up there to set some downside hedges to our overall Hedged Long exposure in our Global Futures Benchmark Program Positions Tracker.
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Let’s look at a few charts, first up and one of the things we are keying on is the Nasdaq vs SP500 spread, this thing has been a one way freight train and if the market is indeed turning south, we would expect this spread to narrow things down a bit:
Even more pronounced is the Nasdaq vs a 2x Russell2k:
when we look at the Nasdaq chart, we can see its right back into our “Breakout Box” and to say 10578 is key, well that is an understatement:
The SP500 3165 level is our do/die Bear/Bull and we know this rejection requires a sustained trade and close below this level, Tuesday’s close is key:
Finally the Dow Futures depicting a decent hammer rejection candle and putting the 25410 50eMA into focus:
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