Failing Thursday – Indexes Fail to Find Support as Crypto Crashes
That's the overshoot on the S&P 500 (/ES) Futures now that 4,000 has failed. There's nothing wrong with testing it but the fact that 4,000 offered us little (or no) support is concerning, as we had hoped 4,000 might prove out as the middle of the range on the S&P but, without that, we would have to consider 4,000 to be the top of a range we have yet to explore, that bottoms out at 3,200 – 20% below the 4,000 line.
I find it very concerning that volume didn't spike as we crossed 4,000, which indicates there are no bullish buying programs that were triggered at that support – that's what gives you support. If we consider a simpler approach for Money Managers who aren't cognizant of our 5% Rule™, they would likely be looking for a 20% correction from 4,800, which is our 3,840 line so THAT is where we'd BETTER find support or we will be praying 3,200 holds!
The Nasdaq 100 (NDX) is 30% off its high of 16,500 at 11,550 but I'd call 11,500 that support line and the Nasdaq topped out a bit higher than 16,500 – but it as an overshoot so we're ignoring it. We hoped yesterday would be enough and we cashed out a couple of our hedges (partially) but we'll have to put them right back on into the weekend if there's no sign of a bottom here.
We're a little brave because I'm seeing a lot of stocks that are getting interesting at this point (see yesterday's list) and, whether they sell off further or not, they are still worth buying at this point. As I said at the start of the week, we are suffering from a lack of catalysts to turn the market around and, sheeple that they are, the TV pundits have suddenly gone negative so now it's non-stop doom and gloom in the Financial Media. With Bitcoin at $28,000, there's a lot of focus on that and what it means but PSW Members know it means NOTHING! because it's a meaningless made-up currency – just another meme that's blowing up but nothing that reflects on…