Markets Wobble on Monday But Hold: Now What?

Will the markets resume higher or move lower from here?

Please Note: Our Game Plan from Sunday night is still largely in effect. If you missed it earlier, the link can be found here!

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Technical Edge — 

• NYSE Breadth: 47% Upside Volume

• NASDAQ Breadth: 49% Upside Volume

We did not get the breadth reading we needed today for a significant upside breadth stretch (over a five-day period). In a way, I’m glad. It would have further complicated things and left a muddier view. 

That said, the reality is we had a pretty powerful four-day rally and even Monday’s mild dip did little damage given the five-day performance. However, we’re now talking about five days as if the last five weeks haven’t been a near disaster for the bulls. 

Without enough evidence in the bulls’ pocket, I think it’s too early to completely rule out that the correction is completely over. At the very least, it’s too early to rule out a retest of the March lows. 

There are still issues, the main of which are: Ukraine-Russia, inflation, and Fed tightening (but at least we have clarity with the last one. That’s a start!)

Game Plan

For the first time in almost a week, we had a rather chill day. I will default to Monday morning’s video with most of our approaches, but I’ll touch on a few key areas below, starting with the S&P. 

S&P 500 — ES

On the upside, keep an eye on the 4466 area — last week’s high — and the 200-day. A strong push above that could open the door to the 4540 to 4580 zone. 

On the downside, losing Monday’s low at 4415 and the 50-day could put 4400 and the 10-day in play. Below both measures and the 21-day is on tap.  

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Nasdaq — QQQ, PANW, NKE, Oil & the Go-To Watchlist

Go-To Watch List

*Feel free to build your own trades off these relative strength leaders*

Numbered are the ones I’m watching most closely. Please look at these closely. 

1. BRK.B — Hit $342 trim spot. Now hit second trim spot at $350 — down to runners but no problem with cashing out completely here and look for a BTD opportunity.

2. VRTX — Trimmed ⅓ at/near $250. $254-$255 next trim spot (small).

3. COST —  Boom! Trimmed ½ at $565.

……

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Economic Outlook

Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!