Watchlist 23rd February 2022

The previous lows have been retested on QQQ’s followed by a weak bounce. The S&P500 came close to retesting the $420 region yet managed to put in a higher low when compared to the previous sell off.

So far most of the gains take place pre market on low volume, indicating that we’re only moving higher when a limited amount of participants have access to trade. This type of market behaviour raises a few red flags for me, especially when those gap ups are sold into.

As we can see on the daily QQQs chart we’ve now been stuck under the 200ma for 23 days and under the 10ma for 7 trading sessions; Indicating an overall change of direction. However with yesterdays hold of previous lows I feel we could see more dip buyers stepping in before heading lower.

Every time we’ve bounced (from the previous lows) a lower high has been made. If this trend continues and we fail to break past the 10ma then I struggle to think of a single reason as to why we wouldn’t head lower. Right now however, we just need to sit tight and wait.

Spot GOLD has now begun to flag after its initial breakout, sitting just below the $1,917 region. This is the most significant level on GOLD and would represent extreme bullishness if we break above. So far it’s been a very slow mover, with a total move of 3 ADRs in 9 days. Showcasing just how tight this range is getting.

We’re also seeing the MAs now align perfectly, with the 10ma, 50ma, 100ma and 200ma in perfection correlation (one below the other). Signifying an overall trend change, something we haven’t seen since its previous rally in 2020. Making this an A+ set up.

In summary we have an equity market getting heavily sold into and GOLD try to break away from a setup that’s been brewing for 10 years.

So right now my daily plan is to sit and wait patiently. Equities are not presenting good entries until a range is built or we head lower.