Still Waiting For Support

April 19, 2024
Author: Peter Stolcers, Founder of OneOption

The depth and speed of this drop suggests a fair amount of selling pressure. We have to wait for a selling climax. Here's what I am watching.

PRE-OPEN MARKET COMMENTS FRIDAY - The market has been able to hold the losses from the long red candles. Typically on a big move lower, the market will rest the next day. Back-to-back sell-offs are fairly rare. When we get a day of rest, we watch to see how much of the long red candle is retraced. If it is entirely retraced, it is a sign that buyers are present. If the market can't retrace that red candle at all, it is a sign that the selling pressure is heavy and that there will be follow through. Monday the market sold off hard and Tuesday we rested right at the low from Monday. That was a bearish sign and Wednesday the market staged another leg lower and it closed near its low of the day. Thursday we did see a little buying early in the day, but that was quickly squashed and the market closed on its low of the day. That was the first attempt at a bounce and it was easily rejected.

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