On Monday the markets opened the week sharply lower to the downside.
There was a palpable sense of panic as everyone speculated whether this was the big sell-off media pundits had been portending.
As Monday progressed however buyers quickly stepped in over and over again at key points and began to chip away at the large losses. By mid-week buyers were firmly in control and by the time it was all said and done most major markets had ended, wait for it, positive for the week.
Epic trading action this week and the adage that “the crowd is usually wrong” was once again demonstrated.
This week’s sell-off on Monday hit most of our downside targets we posted last week with the exception of the 2 remaining gaps @ 177.48 and 173.22.
The likely scenario is that we’ve found a short term bottom here.
A playable trade is for the market to pullback to the downside to fill the gap @ 194.68 followed by a rally to fill the gap @ 208.32 and a re-test of the symmetrical triangle.
Here’s an update on our sector rotation watch.
- Role reversal – Energy rallied hard this week while Utilities sold off
- Although major technical damage was done to many of the former leading sectors, if the bottoms that were formed this week aren’t violated then time (consolidation) can still heal all wounds
The major sectors are posted here on Finviz for your viewing pleasure –