Is this the beginning of the correction that so many traders have been waiting for? Or is this just a shake out from the typical OpEx week activities? In regardless what it turns out to be, the important thing to pay attention to is the price action. Definitely some high flying stocks in the cloud space and in the rare earth sector have came back down to earth (pun intended). Some of the market leaders in the tech sector also have retreated.
Although there was some damage done to the market indices from the recent pull back, but the damage is not enough to change the current trend. That does not mean there is no headwind that can cause the current trend to be changed. The SP500 is trying to hold support near the 1278 level, the Nasdaq 100 could drop down to test the 2250 level if it fails to hold on to its 20 EMA support, and the Russell 2000 has broken below its 20 EMA and is coming down to test the 50 SMA for support.
SP500:
Nasdaq 100:
Russell 2000:
DJIA:
Until the market has tested and held its support level, I will continue to be cautious and I will not rush to open new positions (long and short).
