Stocks have retraced significantly in what appears to be a megaphone-like pattern. For the pedantic, a proper megaphone pattern requires higher highs as well, which we don't seem to have, but the spirit of the megaphone pattern is expanding volatility which we do see, especially on the down side. These current levels are a make-or-break for stocks. The level 3867 is crucial here, as it is the intersection of a tend line and a technical and Fibonacci level. If we break this we will have a lot of momentum, and could easily slice through 3846 to find support at 3824 or even 3810. Fundamentally, investors are fearful that a rise in the bond yields will result in a more hawkish Fed, and stocks are loving their low interest rate environment and easy money policies. Watch for hints of the Fed's direction when Jerome Powell speaks tomorrow. If you have faith in the stock market, then any dip should be considered a buying opportunity, as once the news is digested, hawkish or not, stocks will likely rip back to highs.
Comment:
stocks are getting some support by the trendline and level, but are looking kinda weak... keep your eyes on this 👀
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