"The Urge to Surge" Worked. Now What?

Trading ARKK, SPY, QQQ and others.

Technical Edge — 

• NYSE Breadth: 92% Upside Volume (!!)

• NASDAQ Breadth: 89% Upside Volume (!)

• VIX: ~$29.50

On Friday we wrote: “You can feel the market’s “urge to surge” and tear up those who have flipped from long to short and gotten too far offsides with the short trade. Could we be looking at some type of dead-cat bounce?”

That’s exactly what we got. Now the question becomes, how much relief will this rally provide?  

Game Plan — S&P (ES and SPY), Nasdaq (NQ and QQQ), ARKK, Individual Stocks

Despite Friday’s rebound, the S&P still finished lower for the week. In total, it’s now down in six straight weeks.

Bulls are due a bounce, I’m just not sure how long this one will last. At least we came into Friday bullish, so that got us in a great position. Not only were we bullish, but we avoided the pain of being short. 

S&P 500

As highlighted on Friday, each leg of this downtrend has provided a rally back to the 50% retracement. If we can do that again, it puts 4080 on the table. 

On the upside, the roadmap is pretty clear.