Good morning and Happy Friday!
Markets may have found their bottom based on the consolidation patterns I am seeing. After a shallow drop in the SPX of 2.5%, markets are consolidating at the upper side of of the lower range. What that means is that the market has found support at the 50 day moving average, which is at 4434 and it coincides with trendline support. The high of that range is just below 4490 and it is looking like it will break out of that range to the upside. The reason I think that it will not go lower is because one, inflation is starting to moderate, two, the Fed will not be tapering because there has been more weakness in the economy mostly due to covid, so the bond buying continues and three, there is way too much money on the sidelines waiting to find a home in stocks, since that’s the only game in town. But, if it does break below 4425, we can see the market go lower. So for now, stay long and buy great companies that have dipped like AAPL, MRNA, CRWD, DOCU and RBLX. You can’t go wrong with those. Enjoy your weekend!
Founder | SimpleOptionStrategies.com
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