We had a huge rally based on the AI excitement and its understandable, I was trading a lot. That said, i always felt it was short lived as only very few companies will reflect that excitement with their earnings. There are a lot of negative divergence throughout the tech sector ( RSI and price ). This rally may be a huge head fake and I think a lot of individual investors were sucked in.
Are the dollars made on the long side any less real because it was (or may have been) a “head fake”? FWIW the market has come a long way off the lows. A pullback and consolidation would be perfectly normal at this stage. Yet, to fully round-trip back to the lows would require some major upset on the fundamental/macro/econ front.
Thats not what I mean. We all ( traders) took advantage of this rally and we could care less why we rallied. That said, those that are still long or those that jumped in late may be in for a very rough ride to the down. This was the ultimate “ feel good rally” that I believe sucked a lot of individual investors in. Even many on Wall Street may have been fooled. As a trader, Im in and out so it really makes no difference to me. There is always a sector to trade long.
%% I see his points, looks like yours are more accurate; but if I did not know the big difference between a rally + uptrend. I may have posted as he did. RSI gives so many false signals, actually, a huge number of fake[noise] signals , that could be a signal also . Good pullback last week in SPY benchmark. I like a 50,200dma ,but many buy + sell ,+ sell+ buy, not based on that.
It could be like the many false rallies during Volker when he retreated from raising rates only to double down later on OR it could be the start of a monster run similar to the the Netscape IPO. The nVidia earnings did appear like a Netscape event. If I remember correctly the Fed just finished raising rates in 1994 to combat inflation and the markets were lackadaisical until the NSCP IPO. And then a monster run from 1996 to March 2000.
%% LOL if one misses most of the dollars on long side, you nailed it =they were less real. As far a top, QQQ makes one every day, but much better tops+ trends than SQQQ,2023+ all data; and higher lows, higher closes. But if one's main time frame is 5 minutes \may have a lot of problems with ''head fakes'' My comments are not really referring to single stock risk. My comments are not limited to day-trading but Don Bright Daytrading Co was more concerned with bid-ask patterns than any top prediction. SQQQ has made plenty of downtrending tops, lower closes, lower highs \so to each his own . Thanks for you clear correction.
Every day in the summer months is low volume, relative to the year in general. But tomorrow is Euro and USA inflation data, and also last day of the month/end of Q2. I suspect it will be higher-than-usual volume.
Every time there's the rare red day it just rips higher with a V. There has not been a single time where it has put any type of sell momentum all year. It's V after V. QQQ hit 357 on Monday and look where it's now. Now it's the summer months where the chance of any selloff is near 0. Could be some really slow choppy days ahead, but anytime there's a red day expect an instant V the next day. It never fails this year. So don't let any rare red day fool you, this market can't go down.