MarketSurge powers the charts in this video.
Volatility tends to spike at turning points. Was last week one or was it just another shakeout in a bull market? After all, the Nasdaq 100 just tested its 50-day moving average and bounced, making a higher low. We can talk about the possibility of a more serious correction if QQQ quickly goes below its 50dma and start trading there.
The Fed cut rates by 25bps and yet rates went up again reflecting the market’s expectations for higher inflation and a more hawkish Fed in 2025. Algos panicked and the stock indexes had their biggest one-day selloff since 2022. We saw a bounce attempt on Friday, so now the question is if this will be just another quick V-shaped recovery or the beginning of a deeper pullback. Is this buy the dip or short the rip market? We will know soon enough. What we know so far is that market breadth has been deteriorating for the past few weeks. Momentum leaders have been under pressure as well. Look at the price action in anything crypto-related, TSLA, quantum computing, or semis. The best swing trade opportunities come right after a market correction so even if we get one, there will be much better opportunities down the road.
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