The market is in a waiting game, as traders anticipate which direction the market will move next.
The market is at a spot where it’ll need to fight hard to change its structure to bullish. For any sustainable rally for the market, we’ll need to see the items in our “Double Bottom Recipe” come together.
For the market to rally, we’ll need to see the Dollar (DXY) break down. However, the DXY is above the 21 exponential moving average (EMA) and isn’t at a spot where it will likely break farther down. There are Big 3 buy signals on the daily and 4-hour chart, signalling a bullish trend for DXY. We’ll need to see DXY start to pull back on a day-to-day basis. The S&P 500 and QQQ could start to move higher once the DXY begins to head lower.
Any bounce in the market will be short-lived unless HYG gets above previous support around $73. Its structure is still bearish with daily, 4-hour, and 2-hour Big 3 sell signals.
Any downside in AAPL or TSLA could drag the rest of the market lower, considering they make up such a large portion of the S&P 500 index and QQQ index.
In the video above, we’ll review the recipe for a double bottom in the market, specifically the S&P 500 and QQQ. We’ll use TSLA and AAPL as examples of whether the market can hold support or not. If these names break through support, there’s a large gap to reach the June lows below.
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