Forced selling of epic proportions plagued the market all week long, which has hardly been able to muster any kind of sustainable reaction rally as it has continued to plumb lower lows. Things are so far down at this point that it becomes more useful to look at weekly charts in order to figure out where we are and where we may go from here, at least in the short term.
We did end the week with a big rally, which has some contextual logic to it given the position of the indexes and the way they finished off the week. For example, the NASDAQ Composite Index broke below its June 2019 low at 6190.17 Thursday and rallied to close well above that low in a typical undercut & rally (U&R) move on Friday.
From the perspective of the S&P 500, the situation is relatively well-defined. It sliced through its own June 2019 low at 2728.81 on Thursday and remains just below, closing Friday at 2711.01. While it has not posted a clear U&R move, it is in a logical position from which to do so this coming week.
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