The beginning of the end.....of the quarter

$SPY $QQQ $IWM

Pawley’s Island South Carolina

I love trading. But I really enjoy getting away from time to time and completely unplugging from the markets too. It’s healthy and smart to make time to refresh and recharge. It often leads to the realization of new thoughts and ideas or some fresh perspective.

I spent most of last week looking at a view like this instead of the markets and the charts. There are a lot of similarities though.

The tide comes in, and the tide goes out. And the waves keep coming in whether the tide is rising or falling.

Stock prices do the same thing. Last week it looks like the tide started to rise. It’s a nice bounce, for sure. But I see many similarities to the action at the end of May/beginning of June. Prices got above the 8/21 EMAs and moved into the 50-day SMA when they got rejected hard. Only time will tell if we see similar behavior this time.

As for the start of the week, this was not a bad day for the bulls. A bit choppy, but the consolidation in the upper end of the range leans bullish. Thursday is the last day of the quarter and there is some chatter about recession, portfolio rebalancing, the order flows that will come with that, and the effect it may have. I’m not sure what to make of it. So let’s just stick to the charts and see what they tell us.

$SPY dancing around the 21ema on very light volume.

$QQQ traded on both sides of short-term resistance and was able to close above the 21ema.

$IWM is pretty similar, closing right at the 21ema.

Things to watch tomorrow:

• Can $SPY get back above, and stay above the 21 EMA

• Can $QQQ stay above today’s low to keep the move intact

• Can $IWM hold above, and stay above the 21 EMA

If all of those things can happen then keep an eye on the June 9 lows and the gap fill. If prices fail then watch the 8-day EMAs and the Friday lows very closely.

Good luck, and happy trading.