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Is This A Fake Move In U.S. Markets?

By Anna CoullingStock MarketsNov 26, 2021 07:05AM ET
www.investing.com/analysis/is-this-a-fake-move-in-us-markets-200609630
Is This A Fake Move In U.S. Markets?
By Anna Coulling   |  Nov 26, 2021 07:05AM ET
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As US markets open in the midst of the Thanksgiving holiday season, it’s been a traumatic start to the end of the week, with all three indices trading sharply lower, with the Dow Jones falling over 1000 points at the time of writing, with an equally dramatic move on the S&P 500 which has fallen over 100 points. For the NASDAQ 100 the move has been less dramatic, but nevertheless is following the sell-off, and is currently trading at 16,161 at the time of writing.

NQ-Daily-Chart
NQ-Daily-Chart

Again for regular readers you will recall my last post for NASDAQ futures contract entitled ‘Is Santa’s rally running out of steam? and perhaps the answer to this rhetorical question as we consider the charts this morning, is that it certainly seems to be the case. The question of course is whether today’s market swoon is simply a knee-jerk reaction to the latest pandemic news or a more serious structural fracture before we witness a longer-term reversal in sentiment.

This is too early to say as in the past we have seen dramatic V-shaped reversals, so it’s a question of being patient and waiting for the volume to confirm today’s price action and see what unfolds in the early part of next week. Often during holiday periods, we do see the market makers develop trap moves on low volume and low liquidity, and is a classic move, so the closing volume for today will reveal whether this is a genuine move or fake. I suspect the latter but time will prove me right or wrong.

The weakness I highlighted on the daily chart for NASDAQ futures was the wide spread down candle with a deep wick to the upper body of Nov. 22. These are classic candles and when supported with good volume are the ones to search out in any falling market as they provide excellent re-entry points if you missed the initial move.

So in summary, given this is a holiday period, I suspect this is nothing more than a fake move designed to trap traders and investors before we see an equally sharp recovery. We will see!

Is This A Fake Move In U.S. Markets?
 

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Is This A Fake Move In U.S. Markets?

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Comments (5)
JAMES CUNHA
JAMES CUNHA Nov 28, 2021 10:46PM ET
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the U.S. Markets have become fake.
Sha Sha
Sha Sha Nov 27, 2021 11:55PM ET
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Appreciate if anyone could share their Views and analysis of DAX & DJ for the start of tomorrow morning. Is is headed for a further fall or a bullish trend from start of trading day.
Sudeysi sufiyaan
Sudeysi sufiyaan Nov 27, 2021 4:35PM ET
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nice
Samantha Sa
Samantha Sa Nov 26, 2021 8:20PM ET
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Nice analysis
OLORUNJU JOHNSON
OLORUNJU JOHNSON Nov 26, 2021 12:57PM ET
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Good evening
 
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