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The Market Looks Tired

August 1, 2023
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Good afternoon,

I trust everyone is having a productive trading day. As we navigate the markets in August, historically known as the worst month of the year, it’s essential to be mindful of potential trends and resistance levels.

The SPY is currently down 0.37% at 456.11. Despite this dip, the price action remains above all the moving averages, and the breakout above 455 is still intact. There have been attempts to breach the 460 resistance level, but we’ve encountered rejections in the past. A bearish engulfing candle was observed before the market closed last week, indicating caution. Should SPY start closing below the 455 zone, it may signal the end of the bullish trend, and the critical support at 452 should be closely monitored. Additionally, declining volume is worth noting as it may indicate decreased momentum.

As for the NASDAQ 100 QQQ, it is down 0.34% at 382.37. Bulls have critical support around 374, and a breakthrough here could change the trend outlook. The goal is to reach levels around 393, with resistance at 383 and 387. A breakout above 387 could pave the way for further gains.

The Dow Jones is down 0.04%, trading at 355.42. The DIA (Dow Jones ETF) remains above all the moving averages, indicating a continuing bull trend. If shorts continue to get squeezed, a potential rise to 360 is plausible. Critical support lies at 353, and a close below this level may lead to a descent towards the 350 gap, where the rising 20 daily moving average will act as critical support.

The VIX is up 4.04% at 14.20, hinting at building complacency and potentially signaling a spike in volatility above 15. Staying objective and waiting for a breakout is recommended during such conditions.

Moving on to Bitcoin, it is currently trading around 29,050, still below the breakdown point of old support at 29,500, which now serves as resistance. A significant failure to break this resistance may push the price towards support levels. However, a breakout with high volume buying above 31,000 could turn the sentiment more bullish.

Tesla experienced a 6.16% decline, trading at 261.26. The bearish sentiment persists as long as it remains below 269. In the event of a breakout above 274, there may be a gap to fill above 289, but the overall outlook is still bearish, with a short-term price target of $230, possibly $200.

Let’s remain vigilant and mindful of the market dynamics as we make informed trading decisions.

Trade For Today: Bought Advanced Micro Devices At 113.20 looking for a 5-6.5 point Pop, hearing the numbers tonight will be pretty sweet for the longs.

Best regards,

G. Allan Collins



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