The S&P 500 (SPY) gapped down below a key level of support at $390. Now, we’re looking for the market to take out the June and July lows.
The Nasdaq (QQQ) took out the $290 level and is heading toward the June lows.
This gap lower dragged big names lower like AMZN, GOOGL, AAPL, and TSLA, which is important as these names have a large weight in the overall market.
We’re seeing negative moving average crosses that we’ve been discussing as of late. This occurs when the 21 exponential moving average (EMA) crosses below the 50 simple moving average (SMA).
For example, the QQQ daily chart is showing a negative moving average crossover with bearish Big 3 sell signals from the daily chart down to the 5-min chart.
The SPY daily chart doesn’t have a Big 3 sell signal yet, but there is a fresh negative moving average cross.
What appears unlikely at this point is if the market can save itself from here.
The market is oversold so there could be a bounce toward previous support, but we highly doubt it’ll be followed by a bullish trend to the upside. Most likely, any bounce will be a short squeeze.
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