Hi everyone. I hope everything is going well.
I find the current price action a bit concerning, but whenever I get this type of feeling, nothing terrible happens and it’s just a simple pullback. Although I am still net short, I plan to add longs aggressively once I think the pullback has ended (~10% lower).
Let’s look at QQQ since the largest holdings in this ETF are dragging down the market.
QQQ weekly chart below – I think we move ~10% lower from here:
Monthly chart of SPY below. Notice the large monthly bearish RSI divergence building up. Unfortunately, there isn’t enough sample size to predict what will happen this time.
Enjoy your Sunday, and see you next week like always.
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