Yesterday I advised you to keep an eye on technology and the Nasdaq, and that was exactly where you needed to focus your attention. There were plenty of opportunities to make money. The Nasdaq moved down 1.83%, a huge move down. All the other indexes were down as well. The market sold off. The UVXY, a measure of intraday volatility, ended up at over 6%. Technology had been sitting on its 21-day EMA, but it broke that last night and moved to the downside, but I’d already given you a heads up to watch this index, so you would have known exactly what to look for!
Technology, XLK, which we were focussed on, presented some amazing opportunities. It moved down 1.64%. But the sector down the most was biotech, down 2.76%. Yesterday I showed my Elite students a bearish opportunity in biotech. We rode biotech on the way up, but we recognised that it was looking tired and overbought so we instigated a bearish trade last night and that worked really well. There was weakness through all the sectors, with the exception of financials which were up 0.5%. Utilities were down 1.12%.
Some of the indexes broke below their 21 EMAs on a daily chart, which is obviously bearish. The S&P 500 closed below its 21-day EMA. The Nasdaq closed well below on its 21-EMA. The Russell 2000 is sitting around its 21 EMA, which is interesting. That is one to watch. It might break down. The transports are still strong, still above the 8 and 21 EMAs. The industrials broke their 8 EMA but are still just above their 21 EMA.
The Semiconductors start to break down
SMH is a good index to examine the semiconductor sector, and you’ll see that they are starting to break down. The MACD is pointing down on a daily chart. It broke below its 49 EMA last night. Obviously that is tied in with technology. It is looking bearish and has broken to the downside out of a bear flag pattern.
Opportunities last night
The Nasdaq traded range-bound for the morning, broke below the 30-minute high at midday and then proceeded to sell off for the rest of the afternoon. What were some of the opportunities within the Nasdaq? Netflix was great. It had a huge bear flag, once it broke the ledge at $154.80 it really sold off. There were opportunities to get in and make money with the techniques I teach my elite students. Tesla broke below its 30-minute opening range low of $372 at 12.20pm and was a great trade to the downside. It moved down about $10 to $362.
In IBB (biotech) RARE could have been traded very successfully to the downside. It broke its 30-minute opening range low at 10.20pm and then proceeded to move down. The opening-range low was $64.66 but it got down to $60.55. Day trading is more complicated than just observing 30-minute highs and lows. The elite students are being taught what price and time to get in at and when to take profits and close out. Another great trade to the downside was PRTA. There were plenty of opportunities last night!
I will be watching technology and the Nasdaq. If there is further weakness I will be playing those again to the downside. You should also focus on biotech to the downside and look for further opportunities in that sector. Use the rules and plans and observe the first 30-minutes before you start to trade.