The “rally” on Monday was impressive at times with the Nasdaq and Nasdaq 100 both posting impressive gains. There is a “but” however to yesterday’s action.
The “but” was the butts the market showed to everyone:
-Meh volume on both the NYSE and Nasdaq indicating that not everyone thought this was a true relief rally.
-Market internals indicated a lot of selling and distribution under the surface with the advance/decline volumes plus numbers on the Nasdaq, 1994 advancing vs. 2683 declining, plus worse on the NYSE telling the tale that smart money was selling to dumb money.
-New highs vs. new lows on both the NYSE and Nasdaq were again dreadful.
-Lastly, precious metals and commodities did not move enough to prove that the happy happy China Virus variant stories were relevant in the least.
Thus leading to this morning’s action:
So instead of the usual market manipulation and window dressing to mask the weakness in the markets, there is a good probability that today could, I stress “could” as there are no guarantees, be another bloodbath on Wall Street. The key area to watch on the S&P 500 will be around the 4580 area as a violation of that area with sustained selling could trigger a technical wave of automated liquidations putting 4531 (50 DMA) into play.
The “excuse” for all the red?
Here’s your sign:
Moderna chief predicts existing vaccines will struggle with Omicron
And that’s all it took to trigger the selling in Europe and US futures. Buckle up, we could be going downtown hard today.
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