QQQQ: -.41%
IWM: -1.02%
Finally we have a trend in place. Unfortunately, it's down. Here's a 7 day chart which shows all of the market's action since the big rally.
Notice over the last three days there has been a consistent pattern of lower highs and lower lows. Also note the upper trend line that has provided clear resistance for the SPYs.
Note the same analysis applies to the QQQQs -- which are down 2.6% from their highs at about 52 a few days ago.
And the Russell 2000 is down 3.66% from its high of about 77.8 a few days ago.
Now -- here are some very interesting charts. They are each three days. I have circled all of the gaps down.
Refer back to each corresponding 7 day chart above. We had a strong gap up before the latest three day sell off. That indicates a change in sentiment.
But the serious gaps down indicate a clear hair trigger on the part of traders. Any sign of bad news and they sell.
Let's look at the daily charts.
The SPYs chart shows three down days. Three days ago the SPYs printed a "spinning top":
Spinning Tops are Japanese Candlesticks that have small bodies with upper and lower shadows/wicks that are longer than the body. Spinning tops reflect uncertainty in the market.
Since then the market has sold off. The only good news is the volume has been decreasing on the downside.
The QQQQs have also been declining. However, they found support at the 10 day SMA.
The IWMS have also been declining. But like the SPYs, volume has been decreasing on the downside. And like the QQQQs, the IWMs have found support at their 10 day SMA and the previous resistance line.
These are still very messy markets. While we have a trend in place -- a downside one -- the daily charts don't show any clear trend right now. The large amounts of downside gaps on the daily 5-minute charts indicates traders are extremely nervous and will sell on a dime. In short, the markets are extremely uncertain right now.
