So this morning we saw higher than (for the past couple weeks) normal sell pressure on the bigger names. Meaning there were actual sellers out there this morning on names like AAPl, AMZN, and the broader market in general. It looked to be a switch out of risky assets to more defensives like healthcare and for some reason retail.
Fast forward a couple hours and those sellers became exhausted about mid day and the broader market was doing the thing and going higher. Until there was an ambiguous article from Bloomberg that caused an algo dump "repricing" the market for... no reversal of tariffs? Didn't we know that? Well i guess the broader market didn't and was supposedly pricing in tariff deescalation in this phase 1 deal. as far as i knew it was just the decrease from 15 to 7.5 on one of the tranches of tariffs currently levied.
And just like that financial media turns bearish and pessimistic on the deal.
There was a good fight between the bulls and the bears today but i feel like institutions have been getting out over the past 5 or so days in preparation for a sell the news event on this "phase 1" trade deal. Literally just looking for a catalyst to take profits and wait for a reentry. This volatility, choppiness, and general "toppy" felling has me worried.
When you zoom out on names like AAPL, and TSLA it becomes apparent just how far over stretched we are. Kind of hard not to get a little bit of vertigo. We're ripe for a blow off top. And names like AAPL showed relative weakness today with sell pressure literally the entire day. If the names that have led this rally and have become so far overstretched start to give up the ghost, the entire market goes with it.
There aren't any confirmed sell signals yet but the devil's in the details. Technically we did break down out of an ascending wedge pattern but the broader indices have literally given 0 f***s about those and negative RSI divergences the past 3-4 months so i'm not going to see if that holds water. My sell signal will be on a daily reversal candle.
If we gap below the top blue trendline. Which is the top of the most recent channel. We will most likely revisit $325, and then won't slow down until about $323. If this picks up steam and actually becomes a sell the news event i'd expect a retest of $320 (also where 200 period MA is on the hourly). Anything past that it's completely up in the air considering there's gaps all the way down to $294 with poor market structure the entire way down, see my other posts for insight on supports/resistance linked below.
As i've said before this market is the wild west starting about a week ago with every man for himself and it's only going to get worse as stocks get pared for being overvalued relative to their earnings. Reality (maybe) will start setting in.
And i'm going to end this on the fact that this market is also freakishly irrational and this could have just been a shakeout for a monster buy the news event tomorrow. I'm about 65/35 long still with my hedges mainly being the VIX, and metals.
On another note IWM was absolutely crushing it today until they got bamboozled by bloomberg which throws sand in the gears of my broad market sell off thesis. It finished positive by about .4%.
This is not to be construed as trading advice. This is for entertainment purposes based on my own personal TA.
