After Market Report
More frustration as this market is making mincemeat out of good trade set ups on both the long and short sides. The indices look very weak, but we may be experiencing the beginnings of a sector rotation out of oil and into tech, which, if true, means we had a bullseye painted on us being on the wrong side of both sectors. In any case, after today we are becoming more bullish on the outlook a few days out. What is right in front of us remains pretty bearish, but with tech refusing to head lower and with the end of the month right in front of us, we should see a nice bounce formulating sometime next week. For tomorrow, we should see more downside as the indices sold off into the close. The battle today was between lower oil prices and inflationary worries. In the end, oil failed to inspire and inflation set the course. If oil continues its pullback it could inspire the buyers to come back in soon though
Conditions remain rotten for trading, though as we said, they should vastly improve as end of the month window dressing is upon us. We expect to see bulls defend the trend for the S&P and oversold conditions and increasing fear indicate a very good probability that we will see higher prices late in the week. It would be great to head into the weekend with a hammer reversal signal on the QQQQ. A panicky start tomorrow would almost surely be bought by the pros so conditions are ripe for just such a reversal
