Not much has happened so far this week as stocks have mostly paused the upward move at a sensible area. 

All eyes have been on the 200-day moving averages.   That's not likely to change until the indexes move away from that level. 

SPY 0.00 shows the 200-day MA is close at hand as well as a down-sloping trendline and an RSI reading of 70+

QQQ 0.00 hasn't reached the 200-day MA. It will need to clear the  ATH AVWAP first.

IWM 0.00 dancing on both sides of the 200-day MA for now and the ATH AVWAP is there too.

Even MEME stonks have price memory and technical levels.

BBBY 0.00 has been getting squeezed again. Take a look at where the monstrous move higher finally hit the brakes.

Could this be a warning sign of too much froth in the market? Or is it a good indication that risk appetite is back?

$VIX - continues to drift lower

And the Dollar is a bit undecided

Something else we've been hearing a lot about are Breadth thrusts.

Breadth is a measure of participation in the market. The theory is that when more stocks are participating in the move higher then that move is strong and has a higher likelihood of continuing.

Take a look at this work from my fellow CMT, Jonathan Harrier.

Jonathan Harrier, CMT @jonathanharrier

Rare breadth thrust on $SPX: Only 6 prior times (since 1985) when... Fewer than 10% of $SPX stocks were under their 50-MA, then jumped to 90% above within 2 months Avg returns of 23% a year later, but the very low interim drawdowns of -2.8% are the thing to see. 👇 1/3 $SPY

8:19 PM ∙ Aug 14, 2022

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That’s a pretty solid track record.

But as we all know, only price pays. So while this information may help you form an opinion, remember to keep your eyes on the charts and price levels that matter to you.

I’ll be watching for a continuation of the uptrend and a successful move over the 200-day moving averages.

On the downside, keep an eye on the Monday lows, the 8-day EMAs, and the 50-day SMA on $SPY. If we test those and they can’t hold, a deeper move could be coming.

***This is NOT financial advice. NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.

Andrew Moss is an associated member of T3 Trading Group, LLC (“T3TG”) a SEC registered broker/dealer and member of FINRA/SIPC.  All trades placed by Mr. Moss are done through T3TG.

Statements in this article represent the opinions of that person only and do not necessarily reflect the opinions of T3TG or any other person associated with T3TG.   

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