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July 18, 2022 market review
$SPY $QQQ $AAPL $WOLF
On July 9th $QQQ was breaking above the downtrend line.
The next day it poked through resistance. And in the following days, it moved back down to retest the downtrend line, which has now flipped from resistance to support.
Today it moved up through $295 resistance again. And it got rejected, again. A point for the bears.
This chop can be frustrating, but it is completely normal price action in this environment. Bear market rallies often have trouble sustaining and are very prone to failure and/or misdirection.
Is it part of the bottoming process? It could be. But it could also be a rest in the action before selling pressure increases again.
No one really knows until well after the fact. But there are some other charts to watch for potential clues.
In that same article, I pointed out that $SPY was lagging $QQQ and hadn't even made it to the down-trend line yet.
SP futures got there today but didn't stay long. Another point for the bears.
$AAPL moved past the first resistance line at $147.74 and right into the next one at $151.49 before news of a hiring slow down ignited selling pressure that sent it back down almost to the 8-day EMA. No point, bulls or bears.
$WOLF had a similar move. And I see many more examples of this in the charts this evening.
The point of all of this is to show that levels matter. Price has memory. Areas of potential support and resistance are worth knowing. It's not a silver bullet; that's why it's called "potential" support or resistance. But I'd wager that it comes into play more often than not.
So keep reviewing your charts (and mine if you're finding them helpful) and know your levels and your timeframe. It's still very much a "wait and see" market as far as I'm concerned.
What do you think? Let me know in the comments.