10/17 Recap

We had a big gap down this morning in tech stocks led by the news that the Biden administration was going to curb sales of NVDA chips to China. NVDA was down 7% at one point but has recovered somewhat to only being down 3% as of now. Retail sales came in stronger than expected and lifted the retail names. At this point, we have to put consumer fears behind us, they just are not there regardless of the narratives we hear. Yields also ripped to their near term highs which also pressured equities but even with all that, we rallied to green on both the /ES and /NQ.

The SPY is putting in a bullish engulfing candle for now, but there is alot of time left in the session. All dips are being bought there isn’t much to say, this isn’t really a bearish setup and we’re back into the flag that’s been forming the last few sessions. If this can get over 440 it can make a powerful move.

Small caps are in an interesting spot. The fundamental story just isn’t there with these high rates, but from a chart perspective they look like they’re about to break out and down below in the options today you can see some really interesting positioning in small caps and the levered ETF’s. The chart below shows a clear double bottom on the IWM, sometimes the fundamental story doesn’t have to make sense, the chart is showing buying.

Trends

1 Week

2 Week