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Institutions resumed their distribution from the NQ. Biotech and tech shares are being sold, but they are bought out by new traders and Robinhooders. Today, the supply of buyers ran out and institutions kept on selling.
The VXN was giving warning about a pullback for a few days ago. It's why I didn't go TQQQ / FNGU yet. What do the institutions do with the cash now? They distributed it to non-tech sectors that were undervalued and/or were dividend stocks like financials, utilities, and consumer staples.
Personally, I like the chaos and mayhem of pullbacks. Why? It pummels permabulls and new traders' egos. At the same time, the pullbacks provide opportunities for the patient and disciplined traders.
With high liquidity and 4 big tech companies about to report earnings next week, I am expecting a hype rally after this pullback is over.
Why do I think a bounce would be in order? Let's ignore RSI for a second. How many shorts/bears do you think are trapped just below? How many of them were waiting for a moment to cover their shorts since the NQ reached over $10k? If the NQ reaches slightly lower from here, how many trapped shorts would cover out of fear?
Combine those 3 factors, I think a bounce would be in order. At the same time, this can go further down if the DXY or dollar strength bounces hard too.
The VXN was giving warning about a pullback for a few days ago. It's why I didn't go TQQQ / FNGU yet. What do the institutions do with the cash now? They distributed it to non-tech sectors that were undervalued and/or were dividend stocks like financials, utilities, and consumer staples.
Personally, I like the chaos and mayhem of pullbacks. Why? It pummels permabulls and new traders' egos. At the same time, the pullbacks provide opportunities for the patient and disciplined traders.
With high liquidity and 4 big tech companies about to report earnings next week, I am expecting a hype rally after this pullback is over.
Why do I think a bounce would be in order? Let's ignore RSI for a second. How many shorts/bears do you think are trapped just below? How many of them were waiting for a moment to cover their shorts since the NQ reached over $10k? If the NQ reaches slightly lower from here, how many trapped shorts would cover out of fear?
Combine those 3 factors, I think a bounce would be in order. At the same time, this can go further down if the DXY or dollar strength bounces hard too.
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