Hedge Funds Are Predicting A MASSIVE Move, Will You Be Ready?
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If you’re sensing more weakness in the market, you’re not the only one. Yesterday’s session did not instill too much confidence that this market was poised to go higher after the sell off later in the day. However, it is hard to tell which direction the market will break as we seem to be in an area of congestion where the market is just chopping back and forth.
If the market was to pull further, we would expect the level to watch on SPX to be 4075, if this support is broken, we could make our way back to 4000 in a hurry.
Technology Select Sector SPDR ETF (XLK)
If the market was to make another leg lower, I have my sights set on the sector of the market that has been largely responsible for the recent rally. Stocks like Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA) led the charge with massive rallies that helped fuel this buying pressure throughout the market. However, what goes up in this market, usually comes down.
If these stocks lose steam and head in the other direction, they will almost assuredly take the rest of the market with it. Since indexes like the S&P are so heavily weighted to these stocks, if theses dominos fall, it could very well spook many investors out of the market or at least to open short positions.
The experts seem to be preparing for a pullback as well. According to Bloomberg, hedge funds have opened the largest short position in the S&P in over a decade, perhaps seeing something many of us are not. Keep an eye on the market here, congestion often leads to a big move.
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I look forward to trading with you, but until then, as always…
