Hey Market Pilot,
It has been a difficult, volatile, and heavy market for a couple of weeks now. There were some areas that seemed likely to find support and bounce, but the indexes kept sinking through them. On Monday we continued to get another strong move down, then Tuesday a strong bounce, only to have price drop again for a gap lower Wednesday morning.
It took most of the day, but price rallied Wednesday and what this created is known to the Moxie Indicator™ members as a Trampoline Setup on the 15-minute time frame. In the screenshot below, you can see price dipping below an up-angled, 15-min, 50 simple moving average (SMA) while the Moxie Indicator™ is strongly over the zero line. Assuming this works out, that indicates that energy and momentum are positive and that price should bounce off the 15-min 50 SMA and over the hourly 50 SMA.
Pictured below is the Invesco QQQ Trust (QQQ) on different time frames. By looking at this, I can try to anticipate what might be next. I am expecting some sort of bounce in the market, but don’t get too excited yet. This isn’t the beginning of a renewed long trend or a swing entry. I am viewing it as a bounce back to the mean which will most likely take price do the daily 21 exponential moving average (EMA) or somewhere close to that. This is the first bounce off the lows and will be into overhead resistance. Be aware of that because I would then expect price to pullback, but we don’t know yet know if that pullback will be mild or wild.
We certainly aren’t in the clear yet — despite the rally higher Thursday — and many names are still looking very beat up. Sure an oversold bounce is probably happening now, but don’t mistake it for easy long setups.
Your Profit Pilot, TG