Mish's Market Minute

Patterns Combust into Panic



If you were to look at the Modern Family you'd see a quiet August trading day waiting to hear Fed Chair Powell's speech tomorrow. Grandpa Russell (IWM) fell asleep and closed down for the day firmly stuck in a two-week bullish flag. Meanwhile, SMH edged higher quietly to a new high.

In the mega-camp tech segment, SaleForce (CRM) announced a blowout earnings report, and panic ensued in a select group of the mega-cap tech names. As you probably know, the panic wasn't selling. It was buying.

The buying and the moves it created were so impressive that it felt as if there just wasn't any money left to buy any other stocks.  Notably, AAPL was not included in today's buying spree; it rallied a respectable 1.4%, but its average daily range has been about $12, whereas today it was only up $7.

Apple's absence from today's group of winners fits with an interesting pattern or quality that most impressive movers had today. As AAPL has been in the spotlight for driving the QQQ up to new highs almost daily this month, another condition in mega-tech stocks has been developing.

FB, MSFT, AMZN, ADBE and NFLX were NOT consistently hitting new highs. They were consolidating. Today, however, that changed. They broke out and ran like they were trying to keep up with TSLA!

Were they inspired by CRM's earnings? Getting ahead of expected bullish comments from the Fed tomorrow? A coincidence of several technical breakouts that fueled each other? Playing catch up with AAPL and TSLA?

I suspect a little bit of all of the above.

It will be interesting to see how these moves react to tomorrow's news, and if the Fed can get IWM to explode out of its multi-week consolidation.

Best wishes for your trading,

Geoff Bysshe

President, MarketGauge.com

(Geoff is filling for Mish until August 31st.)

Note: PDL = Prior day low, PDH = Prior day high

  • S&P 500 (SPY): Looking parabolic. 340, then 335 are important support
  • Russell 2000 (IWM): Weak consolidation day. Key area to break is 157, then 160 is resistance area. Support at 155 then swing low is 153.60
  • Dow (DIA): Inside day, Gap fills at 291. Support at 280
  • Nasdaq (QQQ): Looking parabolic. 275 is pivotal support area. 260 is key support level and a trendline
  • TLT (iShares 20+ Year Treasuries): Sitting at the bottom of its range 167-163. In a Warning Phase
Geoff Bysshe
About the author: is the co-founder and President of MarketGauge.com. For nearly 20 years, he's developed trading products, services, strategies and systems while also serving as a trading mentor for MarketGauge customers. He also provides regular commentary and trading instruction in the MarketGauge blog. Geoff is a former floor-trader who was a member of the FINEX trading the U.S. Learn More
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