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Good Monday morning!
Last week started out OK I guess with some choppy price action Monday and Tuesday into Wednesday's gap higher, where at that time, all was looking just fine. HOWEVER, Thursday morning sellers came in aggressively and took the S&P down almost 275 points in two days and the tech heavy NASDAQ lost over 1200 points in those same two days!!! Quite a selloff in a very short period of time!
And now it is only getting worse at this point this morning!!! My what a difference just a few days makes!!! Large cap tech stocks are getting absolutely crushed and even the high flying banks are getting taken out to the woodshed, especially after the news over the weekend that Warren Buffett was dumping his Bank of America holdings. And oh yeah he's been dumping AAPL too! I've been warning everyone for some time that fantasy land will not last forever, I just didn't think they would crush the market this hard and this fast!!!
From the April lows @ 4953 to the all time highs in July @ 5669, the S&P came down to a very important level on Friday around 5310, and it is important because that is a 50% retracement from those lows to highs! My next downside target was @ 5225 (which is the 61.8% retracement), but with the S&P futures down over 220 points as of this writing, price will even be below that level!!! Next stop is 5100 then 4953 in S&P cash!!
In the NDX, from the same April lows to July highs, its 61.8% retracement was hit Friday @ 18,400, and with the futures being down so sharply this morning, we are below the next target of 17,750 and next stop is 17,000! We have not seen gaps down this large in quite some time so please now that we are well below some of our downside targets because we never know with 100% certainty how high or how low markets can actually go, so please take that into consideration!! We do our homework the night before so price action can surprise everyone as to the ultimate strength or weakness that can actually take place!!!
With all that being said, this morning, please remain calm! These kinds of days are very nerve-racking so I hope you and your positions are structured appropriately! Those in cash with some dry powder please know there will be great buying opportunities ahead so start putting together your shopping list. This will take some time however so be patient. We will most likely get some bounces but at this point traders and investors will be selling the rips!
VPOC Update: After a bearish gap down on Friday, the VPOC (which I said was in play) @ 5418.25 was actually not touched during regular trading hours, so that VPOC which was below price is now a VPOC above current price as Friday's high was only 5417.25...so close (but no cigar)!!
Also, a new VPOC was added Friday @ 5467.25 as this was the Point of Control from Thursday. And as price during Friday's session did not even get close to Thursday's range, that is new and untested VPOC added above as well! So in the span of just a few short days, we now have 4 above and 21 below, as 5348.25 was taken out Friday.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5430 - 5440
Key Level: 5362 POC then 5375 VAH & 1/2 Back
downside target is: 5300 - 5290 ** now 5050-5000!
/NQ upside target is: 18,825 - 18,850
Key Level: 18,634 Bottom of spike then 18,574 - 18,560 1/2 Back & POC
downside target is : 18,290 - 18,260 ** now 17,350 - 17,300
/RTY upside target is: 2170 - 2185
downside target is: 2080 - 2070 ** now 1950 - 1925
Economic Data: Light but important data today!
PMI Services @ 9:45 AM EST
ISM Services @ 10:00 AM EST
More Color.......
/ES - Demand $5287-5300 with Supply at $5417-07 then at $5360-43
1. Buyers trapped below $5360 and holding below after a pullback will be looking to play short targeting $5325 then $5310
2. Sellers trapped above $5365 looking to play long targeting $5380 then $5392
SPY - Supply previous Demand at $520-522 with Supply at $531 and
$536-537
1. Buyers trapped below $531after a break and retest from $530 looking to play short targeting $529 then $527
2. Sellers trapped above $532 looking to play long from a break and retest targeting $534 then $535
SPX Demand at $5300 $5325 with Supply at $5425-5420
1. A breakdown below $5425 and holding below after retest from $5420 I will look to play short targeting $5410 then $5400
2. A bounce above $5425 and reclaim support I will look to play long
targeting $4560 then $5475
/NQ Key Demand at $18057-17990 with Supply at $18390-18356
1. Sellers trapped above $17990 looking to play long targeting $18045 and $18125
2. Buyers are trapped below $18390 off and holding , looking to play short targeting $18350 then $18280
QQQ Demand at $435 Supply above at $441-442
1. Sellers trapped above $442 looking to play long off a break and retest
from $443 targeting $445
2. Buyers trapped below $442 after a break and retest below$441 playing short targeting $439
Also watching ...
TSLA Key Demand at $205 with Supply above at $214-216
1. Sellers trapped above $209 looking to play long off a break and retest from $210 targeting $212 then213
2. Buyers trapped below $216 playing a break and retest short from $215 targeting new $212
AMD Key Demand at $129 with Supply above at $137 -138
1. Buyers trapped below $137 looking to short off a break and retest from $136 targeting $134 then $132
2. Sellers trapped above $138 looking to play long targeting $141 then $143
NVDA Key Supply above at $111 with GAP down at $108
1. Buyers trapped below $109 looking to play SHORT targeting LOD
2. I would only like to play long if it can reclaim support above $112
SOXL Gap Down pre market / over night with Supply at $35-34 Demand at $31
1. Looking to play a GAP and go off a bounce below $35 from $34 playing short targeting $33,31 then new LOD
2. A bounce a hold above $35 I would like to play a break and retest long from $36 where Supply flips to back to Demand targeting $37 then $38
Have a great day and be careful!
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