Wang’s Happy Trading

Because of what happened on Friday, I think it’s more important to look at the overall market first before we look at the sectors this weekend. If the overall market decides to go down further, most sectors will likely go with it. So, let’s see how SPX and Nasdaq look.

SPX

SPX closed below the 1440 support level last week. Its weekly MACD dropped lower. If we’re looking for the next support level(s), I see the nearest one being at 1420, which is where the lower weekly BB is. The stronger support is perhaps at 1400.

Nasdaq

Nasdaq went below 2525 on Friday, closing at 2511.25. Its weekly MACD just turned down. The next support is at 2475.

One thing though, VIX is extremely high!
VIX (volatility index)

VIX closed at 25.16 last week, gapping above its weekly upper BB. We have been experiencing high volatility with a general down momentum for almost 3 weeks now (7/19 was the high for the markets). VIX may have gotten ahead of itself and may be maxing out.

Next Tuesday, the Feds will give us the results from the FOMC meeting regarding interest rates. If the Feds soften the language about inflation, give hints about lowering rates, or even actually lowering the rates, the market will likely have favorable reactions. So, we really have to exercise caution and patience. Staying in cash is perhaps still a good stance to take until we hear what the Feds say.

The market certainly could slide further before we get the FOMC meeting results. But, there will likely be bottom-fishers too! So, let’s look at the sectors tomorrow and see if we can find some near-term trading ideas on both long and short sides for next week.

Enjoy your weekend!
HappyTrading! ™