Market Update Into August 29th: Bulls Get Wrecked
This week started off with gaps down on all three of the major indices. Though price attempted to rally into Thursday, it seems that was a fake pump to trap longs as Jerome Powell’s comments on Friday sent markets sharply lower. Now, we find ourselves breaking below or teetering on the edge of previous resistance turned support zones. The bulls are likely clinging to the hope that said zones will flip and become true support but it’s not looking good at this time. The weekly 2u-2d reversal patterns also give additional weight to the potential for further downside from here. Let’s look at the individual names below.
This week, the $SPY ETF closed at $405.31 (-3.99%), failing below the ‘Potential Support Zone’ we highlighted last week, as well as the aVWAP from the ‘Near-Term’ low. Bulls will want to see price find support near the pivot low (yellow line) in the sessions to come.
This week, the $QQQ ETF closed at $307.44 (–4.80%). Price has now broken below both the ‘Potential Support Zone’ as well as the aVWAP from the ‘Near-Term’ low. We now look to our nearest pivot low, around $297, to come in and provide some support in the coming sessions.
This week, the $IWM ETF closed at $188.98 (-3.07%), just inside the ‘Potential Support Zone’ we highlighted last week. As this is the strongest index of the bunch, we’re looking for this area to hold, but if it does not, the aVWAP from the ‘Near-Term’ low could come into play in the sessions to come.
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