We’re seeing a suspiciously big move in the Nasdaq this morning, and I would suggest we take profits on any open options positions at the open because I’m skeptical this can hold.
The number of stocks above their 50-day moving averages is less than 50% in the S&P 500, and just 54% of the Nasdaq 100 (QQQ).
The Nasdaq is also at an all-time high on low volume.
So I would be very careful here because I’m nervous about the upside with so few stocks contributing to this big move.
This looks to me like someone is aggressively buying the Magnificent 7 stocks, and what happens when that stops?
The rug is going to get pulled.
I have no reason to think we’re entering a bear market or a recession, just that we’re very overbought in the near term. And from a technical analysis standpoint, that rubber band is so stretched out, it’s almost impossible for it not to snap back in line because just seven stocks are driving almost everything.
This is a big, BIG red flag…
I’ll cover all that, my daily hitlist of longs and shorts and more in this morning’s “Premarket Must Watch” video!
Roger Scott
Roger Scott Trading
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