Could we see a bounce?
In the weekend review, I pointed out this potential bull case
… prices are getting extended from the moving averages, and the June lows are in sight. Maybe those factors will provide some support.
These factors alone could combine to provide a bounce.
That certainly doesn’t mean it will happen. Just that there are some factors that support the possibility. Let’s have a look.
The charts show that $SPY $QQQ $IWM all printed hammer candles, below the lower Bollinger Bands, and with an RSI < 30.
This setup can be a good bounce signal <IF> the candle reversal pattern is confirmed.
Many individual names, FANGs and otherwise, are showing similar charts.
$META, $AMZN, $AMD, $GOOGL, $MSFT, and more
Tomorrow morning I’ll be watching for the hammer reversal patterns to be confirmed by trading above Friday’s HOD (high of the day).
If this happens, then a further bounce is likely. How long and how far is anyone’s guess. Risk management will be crucial, as always.
That means knowing where the exit is well before entering.
A move below the low of the Friday hammer will negate the pattern.
Another risk factor is the high correlations.
These charts all look the same. Failure in one could very easily lead to failure in many.
Let’s see what happens.
Stay patient. But be ready for anything.
***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.
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