Sam Weiss

The NASDAQ-100 (QQQ) is approaching its critical breakout point at $467 a share. This could pave the way for a run up to $493 as we outlined this week. The SPY is making a corresponding run at its $548 resistance level.

With today’s big move to the upside on the administration’s softening stance on China, we’re starting to get a lot of clarity in the long-term direction of the market.

As we noted yesterday, the third leg down was on the weaker side and the rebound we’re now seeing sort of illustrates that quite clearly.

Today clearly indicates the market is on a third leg down. But volatility is weaker and the distances needed to sustain the sell-off are simply too great at this point. Market is likely to fully bottom on this leg lower.

The $NYMO presses higher while the market pulls back a little off of its highs. It’s still unclear whether we’ll see a third leg lower, but if we do, it will likely be small and short lived.

Market pull-back looks minor at the moment. But as we mentioned yesterday, the market started to show signs of weakened ahead of today’s sell-off. It’s not yet clear whether it will turn into anything more.

There’s some evidence starting to emerge pointing toward a potential third leg lower staring sooner than we might expect. However, the market has still likely bottomed and we’re still due for a multi-month rally.

Markets are just beginning to normalize as signs point toward a multi-week rally on the horizon.

Trading ranges have come down and the market’s violent swings have abated. However, volatility remains high indicating we’re still very early innings in the rally.