Futures are up this morning as I write this, which means we are likely to get a market gap up. I’d be wary of buying it when the market is trading below it’s 200-day moving average.
The stock market gapped down hard on the open Monday, but bulls tried to buy the opening and managed to bounce the market into noon. I looked at Fidelity and they were showing that the orders were heavily weighted to the buy side. In bull markets gap downs make for good buying opportunities and the masses actively trading this market still have bull hats on despite the fact that they are fighting against a bear market trend. The bulls failed and the market sold off a bit into the close.
I have a big cash position now and am doing a little trading on the short side.
Shares of TSLA are putting on a Bollinger Band squeeze and are very close to trading below their current support level. If the stock closes below support soon it will likely start another meaningful decline. In this video I show how I am trading this.
I did the video around 1:30 yesterday and talked about the market action at the time too.
Every single morning I put out a free stock market digest, with my commentary.
To get it go here.
-Mike
