Here’s a recap of the Friday afternoon action – September 23, 2022
QLD QQQ SPY DIA YT T2108 T2107
A quick video about this, ( NYSEARCA: QLD ), I think we are probably going higher on Monday. The bottom is not in, but a trading bottom does, in fact, seem to be in, we will just take a walk here.
This is a 5-minute chart of the QLD ( NYSEARCA: QLD ), that’s the ultra Q. 3:00 is where this thing ( NASDAQ: QQQ ) bottomed and started taking off, so the Q obviously would as well.
How about the SPDR ( NYSEARCA: SPY )? The same thing. How about the DIA ( NYSEARCA: DIA )? The same thing. How about the transports ( BATS: IYT )? The same thing. How about the percentage of stocks that are above their 40-day moving average (T2108)? That is one of the broadest ways you can look at the market, the same thing. How about the ones (T2107) over the 200-day moving average? The same thing.
What I am talking about here is (my work here is basically done), I think we will get a pretty nice rally into Monday. No telling what happens, maybe Putin has his finger on the button or the trigger. Or maybe somebody has their finger on the trigger behind Putin. Maybe nothing happens, maybe everything happens. Who knows? I just know this, from a mechanical standpoint, the market is deeply oversold.
Where we go after a rebound is anybody’s guess. You have to take it one day at a time. But I will tell you this, we will get a rebound and it is going to happen on Monday. If stocks gap down, for whatever reason, like let’s say there’s some kind of bad news and the S&P ( NYSEARCA: SPY ) gaps down, you have got to be in there buying for a trade. In my mind, absolutely.
If on the other hand, the S&P ( NYSEARCA: SPY ) gaps up, that is actually where you have to be more careful because we do still have the sellers in charge. There is selling into strength, that’s just the way things are. It is how things are going to be all the way up until that time they’re not.
The idea is we want to be buying extremes, but we don’t want to be buying extreme moves to the upside. We want to be buying extreme moves to the downside in an oversold situation, in a trade-the-panic trade. I will say it one last time and then I am out of here. If we get a gap down on Monday, go ahead and look at that 1-minute, you look at the 5-minute. You wait until you see some green bars and then, boom, you pull the trigger and there’s your trade.
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