Mid-Day Update – 6/28/2021

The NASDAQ 100 diverged higher once again as the liquidation break in the S&P 500 arrived right on schedule. The two-hour 24-Hr S&P 500 Index futures chart, our master day-trading chart, is now in a sell signal, favoring shorting rallies on the compacted 5 and 15-minute time frames. 

Now, the question is whether today will deliver a one or two-step liquidation. If a two-step, there will be another down leg later this afternoon equal to the one this morning, the only question being from what starting point. For now, our line in the sand held at the Globex low at 4268.50 (they ran the stops right below the level).

We stopped one-time-framing lower on the 30-min chart a few minutes ago on a very slow turn higher. But we would need to take out 4274.50 to keep last week’s rally going. We are rangebound, but note the descending triangle on the 5-minute chart. After the liquidation break, we slowed to a crawl. At the moment, internals remain weak on the NYSE but not too bad on the NASDAQ. Oil and financials have broken back to the downside, with industrials and small caps declining on their heels. 

It is a growth-style tech show again today. But with the negative internals on the NYSE, how long can the market hold together with the FAANG+T stocks carrying all the weight? I will remain a trader here – no swing trades are coming up yet. I have one good short, one barely profitable short, and one barely profitable long trade under my belt so far, and I don’t typically trade Mondays.

A.F. Thornton