I have been saying that small cap stocks are the tell since the election when they soared 20+% and I went Bearish. Then as they have gone essentially NOWHERE for 6 months and the Bollinger bands are the tightest they have been in over a decade.
And that continues to be the same story. Although this time it is a little different. After the action today I see 2 possible scenarios going forward and the small caps are WHAT MATTERS.
1. The small caps break up out of the weekly Bollinger bands and start the next leg higher while the QQQ and SPY negate the intraday bigtime Reversal and all is well in the market once again.
2. The small caps fail breakout to the upside and reverse breaking lower and tech QQQ and SPY will get obliterated in the coming weeks.
I, personally, believe that the odds that QQQ has hit a low are essentially zero. I am 85% cash in the 401k and will be looking to by back when the tech wreck is complete in a few weeks. Did anyone see what happened to AAPL AMZN FB and NFLX today? I think this is only just the beginning and wouldn’t be surprised to see a much bigger flash crash with these tech stocks.
This is gross looking and is going lower. Patience grasshoppers. The buy is around 125 after the pause at 130.