Morning Note 7.08.24
Is the recovery for real?
Current Market Conditions:
How did the indices act yesterday?
We bounced back in all asset classes (except Gold and Bonds (Save Haven)), QQQ was leading on the upside, however in the end of the trading day we saw hgih volume selling, that took us down a notch:
Small Caps was basically the same thing, but didnt go up as much and also didnt get sold as hard:
What are the main trends right now?
We are in a Bear market until proven otherwise
The Rotation to Small Caps was a Trap
The Rotation from Growth to Value is intact still:
Bonds are now inversely correlated with equities
Whats the Current Risk Appetite in Markets?
→ Low, although we may have seen capitulation yesterday.
What is my positioning, based on what I know about the markets:
I am now fully in Cash (in a Money Market Fund), and will wait this out, if it is a bottom it will still shake out some weak hands, and if its a dead cat bounce I wouldnt want to be long anyways.
Daily Focus List
MELI, CWAN, PLTR, PSN, UPST, NET, ZETA, KWEB
(This list can be copied and pasted at once into a TradingView watchlist)
Setups In Scope:
Review of yesterdays trade idea PSN. As I said, I did not try to take it, since overall market conditions are not where they need to be for a Swing trade, however it is interesting to see how the trade ideas would have played out, and if some breakouts are holding here, I get a bottom up signal that the market conditions are getting better.
The trade got triggered with a 30min close above the trendline and looked promising for another 30min before getting sold off again, it then tried to recover with low volume and tiny up candles and got sold off into the close.
Failed breakouts like this are to be expected in the current market environment, however PSN is still set up, on a beaktest othe breakout line and right at horizontal support. Lets see how it does today!