Today has had an interesting market dynamic since the open of trading. We are seeing a few repeated trends that I have been watching:
1. Every day that the market opens down, we seem to close on lows. And every day that the market opens higher, the market seems to close on highs. Here’s the daily chart of the Nasdaq e-mini future for reference:
2. European selling pressure hits the market just about every night.
3. We are alternating up and down days in the market.
Today, we saw more of that European selling pressure overnight, so that trend seems to be continuing. But, we haven’t seen continuation selling after what was near lows that almost triggered another circuit breaker for the market. Here’s the intra-day chart of the Nasdaq e-mini future including yesterday’s trading and the overnight move to limit down for reference:
Additionally, if the market continues to see buying throughout the day, we may finally see two consecutive up days in the market, which we haven’t seen since February 28th and March 2nd.
For now, I am continuing to monitor all of these patterns and many more for a change in behavior. Changing market behavior is a good sign to me that the position liquidation may be over (soon) on a technical basis. Of course, new fundamental updates can quickly derail any sort of recovery, but for now, I am feeling a bit more optimistic, at the very least. Now, we simply have to figure out how to leverage that trade, and that’s sometimes the hardest part.