Source: Yahoo Finance
- Market sell-off has picked up momentum. Good news is that we have tested the October lows. Bad news is that there is no respite. We have not seen any pull back on high volume.
- High fliers such as FAANG stocks have lost almost 1 trillion value since the October rout.
- There’s only 2 short term scenarios that arise from here. First, we rebound from here and retest the 200 day moving average and then will know for sure if we have any real rally. Or, we continue selling and test February lows.
- We discussed in an earlier post that the SMART MONEY has already been pulling out of these stocks. Check out the charts to see the negative money flow in these stocks since July. These stocks continued to grow as the SMART MONEY WAS carefully decreasing exposure to these stocks.
- On the other hand, technical indicators show that the market is clearly oversold. Check the charts here and see how the stocks are outside the Bollinger Band range. Other significant point to be noted is that the Stochastics and RSI show decreased momentum where as the price has decreased. This DIVERGENCE is further proof that the markets are due for a rebound sooner rather than later.
- The sentiment is overly bearish currently with reports and news of DOOMSDAY, CAPITULATION etc getting stronger. We have discussed earlier as well that ‘BEARISH SENTIMENT’ can predict a Market Bottom.
KEEP CHECKING US OUT AS WE KEEP UPDATING HERE WITH NEW POSTS/ IDEAS TO UPDATE ON THE MARKET TRENDS.