5 reasons to be cautious on markets near term
We started the week yesterday, on a bullish tone, breaking out above last weeks range to new highs, with a flurry of stocks making new 52 week highs.
We published this post discussing breakout candidates for long trade ideas.
But that bullish energy from yesterday changed rather abruptly after we opened up today with a gap lower, followed up by persistent intraday weakness.
Here’s 5 reasons to be cautious on markets near term
- We’ve now got a potential island reversal in the SPY, trapping yesterday’s buyers.
- We closed back below Monday’s breakout area, and into last week’s SPY range.
- We closed the day on the lows.
- The NYMO traded down to the lowest levels since 8/4.
- We’re seeing signs of the VIX stabilizing around these levels.
Remember, these are just near term data points, intermediate and longer term time-frames are still dominated by the bulls.
Members and I initiated a position in SPXS today to play this potential reversal while keeping our existing long holdings on.
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Best of luck trading, and remember we have the potential FOMC catalyst on deck tomorrow.
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