The Follow-Through: Bounce
Stock market traders delivered a classic bounce from oversold trading conditions. The S&P 500 (SPY) confirmed a picture-perfect test of support at its 50-day moving average (DMA). The NASDAQ (COMPQX) pulled off a picture-perfect toe tap of its lower Bollinger Band (BB). The iShares Trust Russell 2000 Index ETF (IWM) confirmed a test of the lower bound of its 2021 trading range. The bounce from oversold conditions progressed in near perfect harmony. However, IWM lost 1.6% in what could be a precursor of an expected pause from such a strong bounce from oversold.
See below for the video covering the follow-through trades to Declining Market Breadth Resolved Into An Oversold Trading Period – Above the 40 (July 19, 2021).
Stocks and Indices Covered
- S&P 500 (SPY)
- Nasdaq (COMPQX)
- iShares Trust Russell 2000 Index ETF (IWM)
- volatility index (VIX)
- Apple (AAPL)
- Caterpillar Inc (CAT)
- Upwork (UPWK)
Be careful out there!
Full disclosure: long AAPL calls, long UPWK, long IWM call spread, long UVXY call spread
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