By: Tom Gentile
on February 11th, 2022
I had a little fun in my weekly newsletter by asking what your favorite dip was and I added pics of a bean dip, a spinach and artichoke dip and a ranch dip. I then said but how about a ‘Tech Dip?’
Prior to the last two days of trade, it looked like investors favored the Tech Stocks. The dip in Tech happened through January and looked like it found a (double) bottom between January 24-27, 2022.
The run up since then was going really well until the last two days. The NASDAQ, (along with the Dow and S&P 500 have both sold off the last two days).
Is the Stock Market Going to be OK? Let’s start with a look at the NASDAQ
Take a look at the Q’s, the Invesco QQQ Trust, which is what I use to represent the tech-heavy NASDAQ.
In this 100-day chart you can see where the Q’ bounced of their January lows only to trade up to an a=overhead resistance that is the 200-day Simple Moving Average (SMA).
A retrace to the January lows wouldn’t surprise me, but from a bullish perspective it would be nice to see the Q’ trade up and close above the 200-day SMA.
Taking a look at the Chart on the SPY Stock / ETF:
The SPY Stock/ ETF actually shows it dipped below the 200-day SMA only to rally and stay above it the last 11-trading days.
This is a delayed chart in my tools, so if you want real-time stock market live quotes check your brokerage platforms for that.
What I would say needs to happen to keep a bullish bias is the SPY needs to stay above the 200-day SMA.
The boxed range I have on the chart is where price support and resistance are right now. A break below the 200-day SMA and I would go back to my Morning Reports tool and look for active put options.
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