Ugly day for Technology Names and the Naz has closed the previous rare consecutive gaps. We have now broken the 20d as well. I look for three consecutive days below the 20d to indicate a of change in the short-term trend. Appear to be more distribution starting in the AI Trades and folks locking in gains of the crowded AI trade.
Last GMU, we discuss a 4-6% pullback to 6656.59 which was the midpoint of the Bad Break on Oct 10 as our first marker which is approximately a 50d break. (see Clip)
We have received the “market feedback” as new trades are quickly stopped out as breadth deteriorates…….we listen to the market and have been reducing exposure levels. The FL only has three open positions: AVGO, AMD and SNDK which IF someone took all those trades has about 40% exposure and more importantly, they are in names with good profit cushions.
SNDK had a Good ER report last night and pre-market appears it might gap up this AM……..Will be watching this closely as the Earnings Tone has shifted in the past weeks as Mag7 Names had great earnings but are stalled out now and PLTR ER were great but sold off. Are the SNDK ER already priced in?……….When a stock or market cannot move higher on really good news, that is another clue or change in Market “Tone” and gets our attention.
More in today’s GMU.
Trade Well
J