Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
To quote Howard Cosell “Down Goes Frazier” that looks to be the sign from markets. Last week looked like a falling knife, we expect the selling to continue. Finding buyers seemed to be an impossible task. Like a powder keg these markets look to explode to the downside.
For weeks we wrote that by all appearances the markets were topping, funds, commercials and institutions seemed to be waiting for the retail bulls to finish their buying. The trends have change and most stocks look like they are headed lower.
There are so many issues to contend with from inflation to supply chain not to mention the FED and rate hikes. For the bulls there is not a lot to get excited about, there are few reasons to buy. All signs including the price suggests the selling has just begun.
The option world backs the price action with top trading strategies have been bearish. Put and call spread selling, call selling among the leaders. We do expect some sort of bounce this week but will use that as a selling opportunity.
The bulls were buying TSLA, AAPL, GLD, MSFT and NFLX while the bears were selling NEGG, OPEN, CVNA, CEI, and QQQ. The highflyers are always the first to get hammered, this time is no exception. As always be careful with patience and discipline.
Remember, we can’t predict what’s next, but the price action will give indications and guide us in the right direction. All signs are starting to point lower however flexibility is the key to trading successfully.
As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control.
Todd “Bubba” Horwitz