The market finally confirmed it has topped, atleast for the immediate future, as an early morning gap down was followed up with further sell pressure throughout the day. The NASDAQ and S&P 500 both fell over 1% marking their largest losses of the year. Volume was heavier across the board.
Estimating where we might go from here gets interesting. The NASDSAQ found support intraday at 2900 and the S&P 500 at 1340, so those are two obvious areas to watch tomorrow on the downside. On the upside, considering how quickly the market rebounded in the face of previous weakness over the last two months, a rebound session tomorrow to fill today’s gap range is certainly not out of the question either.
Regardless of what happens the rest of the week, the monster momentum run that began in late December has now ended. Volatility is on the rise so the market action overall should get a bit more exciting.
Keep those stops tight, don’t forget to take profits often, and overall stay frosty out there.