YW. I usually don’t post very short-term, intraday analysis/trade ideas via home page posts but figured that this one should go out based on the potential for a late-session rally to park QQQ, AAPL, & some other big stocks back on or above key support levels they undercut earlier today, thereby setting the stage for a potential bear trap & subsequent rally (which would be germane to less-active swing & trend traders, if so).

Other than the short-term “fade the drop into the close via a late-session rally” trading opp, it seems prudent to lighten up before those two big economic reports tmrw am, see which way the market breaks from there, & then re-engage or add back that long or short exposure, at least for those aggressively positioned coming into today. I never bet coin-toss odds aggressively & that’s what I’m seeing right now.

Yes, I have to say that the charts are pricing in the potential for big reversals in Treasuries (falling yields) and the Euro & US Dollar (rallying Euro/falling Dollar), both of which are normally bullish for the stock market. As such, I have not dropped my alternative scenario of “marginal new highs before the bottom falls out” in the stock market just yet.

First, we need to see the recent breakout in the 10-yr yield ($TNX) fail & fail with conviction to trigger a decent sell signal (which is a buy signal for Treasury bonds). Oil is also going to have to come back in quite a bit to see any significant gains in the stock market IMO. Unless something changes, there has been a very strong inverse correlation between the stock market & the $USD (positive correlation to EUR/USD) so well most likely need to see EUR/USD rally off that support zone on the weekly chart I highlighted in today’s video.

All that, coupled with the big support levels on the $NDX & Mag-7 just below could set the stage for a decent rally so I’m open to either scenario & will position accordingly.