DailyPlay Update – May 10, 2022

The SPX finally cracked the weekly cloud bottom, suggesting a continued overall move lower to the next support zone, which given the speed of the decline, can arrive shortly. Where is that? Notice on the below weekly SPX chart that the Lagging Line would hit its cloud top at 3968; the price hitting its channel -bottom at 3941, and its price hitting the Propulsion Full Exhaustion level at 3933. That’s three unrelated targets all within 35 points of each other.  It should be enough to see some buyers show up and potentially get a short-term lift from there.

(However, I do think that 3617 is a logical bigger downside target to the 2022 move, and as such, we’ll still look to sell rallies up against resistance levels – especially if I see multiple ones appear in the same rough area.)

Given the breakdowns across the board in virtually all major US indexes, I’d be exiting our long QQQ trade. The only reason I’m holding it is because, right now it shows a daily Aggressive Sequential -13 that’s now right on the Risk level from the Aggressive Combo -13 from almost two weeks ago. Unrelated to that, a recent Propulsion Full Exhaustion level is right by Monday’s low, too. So, we’ll hold it another day or so to see if we can get a bounce going.  If not, we’ll say bye-bye.

I’m not willing to put on a new short on what is the lows of the move, especially as the SPX and QQQ have support levels/signals right by the current price. We also have plenty of long trade exposure on, so right now I’m not looking to add more in that direction. Thus, we are not going to put on a new trade today, and we’ll see whether investors have any inclination to cover shorts into this support level.