I drew two arrows, one red and one green, showing two potential outcomes over the next few trading sessions. Will the market bounce around and consolidate near the 394 mark and then rebuild? Or will it hit that same 394 wall and then be rejected, further moving down? I think the red arrow is the most likely outcome.
I am not ready to enter into any new positions until I see Wednesday’s candle. I want a clearer sense of what direction we’re headed before I make any commitments. Luckily, nothing is breaking out anyway, Bullish or Bearish.
As far as Bullish setups, the few bright spots have been in the Technology sector. I’m looking for longs there.
For Bearish setups, all other sectors are tremendously beaten down - Financials being the worst, of course. I feel that anything short has already made its move and broken down. You don’t want to chase a falling knife.
Wednesday and Thursday we’ll get a better sense of where the market is headed. Maybe some of those beaten down names will have a bounce that we can then short off of.
-Good Luck and Happy Trading
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