Greetings all!
Overall, an interesting day in the market. The carnage in the tech sector was extensive, but other major indices did not feel (to me) like they were in a vicious sell-off mode. Yes, a solid down day, but none of the mindless panic selling we saw before, in the past 2-3 months.
I will leave the analysis of pivot points, VWAP, Fib levels, etc to others, I’m going to just look at what moving averages on the main 3 indices we have to look forward to, just below us. It seems like those are logical support levels, in the absence of anything specific which will cause panic to take root in the market (in which case, all bets would probably be off). Will they work as such here and now? We’ll know soon enough (in the next 2-3 days, I’d imagine). I just want to alert you to them, so you’re on a lookout for specific index behavior, when such an average is being approached. Even if those averages fail to stop our decline, chances are they might provide a good probability entry for a day/scalp trade.
One support point on a single index is unlikely to stop the sinking of the whole market, but when multiple, different averages on different indices lines up below us, like they are now, there’s always the chance that each individual index will find its own support level, in more or less the same time, allowing us to hold, and maybe, after some chop, reverse the slide.
The S&P500 :
The Nasdaq Composite:
The Russell 2000:
Personally, I will be on the lookout for how the Russell behaves around the 100DMA and the bottom of the BB, with an eye to trade some TNA, for at least a very short term bounce. The 100DMA proved to be solid support during the Japan situation (the only time since Sept that the 50DMA didn’t hold the Russell up), so I would be extremely surprised if we didn’t get some bounce there, no matter how fleeing.
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