On Friday the market behaved as if the sky were falling after the jobs report came in with a shocking loss. If the report is correct, and considering the revisions that usually follow these reports there is no guarantee that it is, then the economy is already in a recession.
We frankly don't know, and so it seems neither does the market. The market has been bouncing around in confusion for weeks now. It's very hard to take Friday's downturn seriously considering how many times the market has whipsawed recently.
Currently the S&P and Dow are still trading in inverted head and shoulders patterns. If the prices can break the neckline of these patterns it would send a very bullish message. The NASDAQ has already broken out of this pattern and on Friday the price merely pulled back to test support.
The tell here will be the NASDAQ. If the NASDAQ fails here, then it will be important to get short, because it would signal that the second shoe may be ready to drop.
Friday's trading was just market noise. Nothing important can be derived from it. Right now we need to watch the NASDAQ. If the QQQQ goes back under $48 and doesn't recover before the close, then look out below.
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