Daily Market News - 21st Jan 2022
The Rise Of The Bears
Ok, I’ll say it.
2022 has been nothing short of a steaming pile of cow dung for those heavily invested and in today’s letter, I want to share the charts I put out to our clients and members last night highlighting some of the key levels where I’d become more accepting of a potential bear market.
I put out a letter 2 days ago highlighting some key levels to watch for a market rebound, these charts are now coming under pressure and I wanted to share a little more of the Technical perspective.
When rallies get sold into with the kind of ferocity we’ve seen over the last few days, I like to listen to what price and the market is telling me… and right now, it’s telling me smarter people than I are managing risk closely and getting out of town, and I think that’s information worth listening to. It’s been that way for a couple of months now.
IWM Small Caps
The writing was on the wall when we put in a failed break out in November and now we’re breaking lower from it’s 12 month range, this isn’t something that lends weight to a bullish thesis. It’s currently a bearish chart.
Could it put in a failed break down and rip higher? Sure, but it’s not something I’d bet on. Bears are in control.
COMPX NASDAQ Composite
I highlighted this chart a couple of days ago with the words along the lines of can we buy the dip at this level…. well, yesterday we hit this level and it’s not looking great. If this chart resolves lower, it’s another bearish chart.
QQQ Technology
Another chart I’ve been watching closely for support levels. It has now closed below the 200 Day Simple Moving Average and the $350 Level is now the level to watch…
If it chooses to break lower, we’d have another check box ticked for the bears.
SPX S&P 500
If the S&P gives up the 4400 level, for me, this becomes a much bigger issue for the market.
We just need to look at the failed break out above the 3,000 level back in 2020 to see how that played out. Fibonacci levels matter in my world and for me, the market needs to stay above this level.
BTCUSD Bitcoin
Overnight, digital assets have taken the next leg lower and while they’ve already crashed, the £30k Bitcoin level is now coming into play and something I’m mentally prepared for and a level I may look to add more.
Conclusion
For me, Captain Obvious is telling me this isn’t an environment that’s currently heavy “risk on”.
Energy, Financials and many of the boring names that’ve recently picked up the baton are now starting to show cracks along with the continued Tech sell off.
It’s a mess out there. Corrections are never fun.
I’m open to a spectacular rebound if Tech finds support which can drag the major averages higher, but IF the charts above start to resolve lower, It’s a problem.
As always, I reserve the right to change my views on 30 seconds notice the second new information presents itself.
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