The Daily Drip

Markets review, strategy and analysis

I will be in Miami for the rest of the week, so I won’t be able to record videos, but I will give you my quick written thoughts on the market action.

SP500.

A very difficult market environment continues to unfold. The SP500 lost yesterday’s low but is yet to take out Friday’s. Whatever is going on underneath the surface, this price action is not offering a lot of confidence. If we lose Friday’s lows and close below them, it will be necessary to raise the caution level to quite elevated. That means heavily reducing exposure to long positions across the board, especially in stocks that follow along.

If wave 3 is done , a 4th is never pretty . We will go to that assumption if we start losing 5690 area.

Nasdaq Composite.

The composite lost a hefty 1.9% and on serious volume. Apparently, most of it was due to small dollar stock dumping but heavy nonetheless. Here we are also above key levels mentioned prior and still above the 50day. Once we lose those, is defense, defense, defense.