📈 Is the Market Due for a Pullback?

These signs paint the picture.

Pullback Incoming?

We had a turbulent day on Friday, with the Nasdaq dropping 1.44%.

Is this the start of a larger pullback? I’ll share some indicators I’m looking at that help tell the story of where I think we’re going.

Nvidia

Let’s start with Nvidia- the stock that has fueled the rally in the market for the past few weeks.

Nvidia dropped over 5% on Friday and has a bearish engulfing on the daily chart now.

One thing to be aware of that I have been discussing for the past week is that the SOXX reached the third standard deviation on Bollinger Bands which signals a 99.7% chance of rejecting at that level, which is exactly what we saw.

Does this mean we are going to continue dropping? Not necessarily. But it is important to understand where we are at and that a pullback is more likely than not.

On the contrary, MSTR which we have been talking about for a while has blown through the third standard deviation. So again this does not necessarily mean that we will 100% pullback.

S&P 500

Another indicator that I use is Demark Sequential which is often accurate (but not always).

We did get a sell signal on the SPY on Demark. You can see the previous sell signals that it has provided - it isn’t always accurate but does have merit to it.

My full thoughts on the market are in the clip below: