Charting the Markets: Bears Take a Vicious Swipe
Will a TACO trade repeal the nasty selling that was experienced on Friday or will there be follow-through?
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What a downer day on Friday as the indexes fell sharply, losing some of the hard-fought gains earned in the prior month. Was it the jobs report? Inflation or growth fears? Unsettled Iran War? Probably a combination, but then again markets have been strong for several weeks now, and nobody rings a bell at the top.
Last Friday was a vicious selloff but it could have been much worse — breadth was only a bit more than 2-1 bearish. Volume levels were elevated, though, and ticks were demonstrably red, meaning a slew of sell programs hit and no buyers were to be found.
Was this the dip to be a buyer? I’m not so sure, we need to see if there is follow-through to the downside; the 10-week moving average sits around 7155 or so, which is another 3% lower. If sellers are really serious and want to get out of the way then the markets will make a beeline towards that level.
The Nasdaq 100 also got hit extremely hard, down 4%. That was the largest move down since April 2025.
Market volatility was on fire as well, with the VIX pushing up 40% in a day, which seems excessive. If the market starts trending down and the VIX stays elevated then there is trouble on the horizon.
The weekly chart did not change much, though money flow is starting to turn down the first time in weeks.
