Stocks are down pretty big to start the new week, and it’s more than random. The question now is if the market is topping out or if it’s just consolidation.
There’s a rhythm in the market where things tend to start the week soft and then build as the week goes on.
So Tuesday, Wednesday and Thursday is when the market tends to be strong, while it weakens on Friday and Monday morning into the afternoon is when it tends to be weaker.
The past couple of months, Mondays have been more of a recalibration day than anything else.
So if you’re buying stocks on a Monday, wait until the end of the day.
Does this happen 100% of the time? Of course not! But that’s the general market rhythm and it’s good to keep that in mind.
Looking at the VIX volatility index this morning, which is up over 7%, keep this 15 level in mind.
If we stay above 15, markets are worried. If we fall back into the channel below 15, markets are complacent.
If my theory holds true, we should start to taper off toward the end of the day.
We also have the latest Consumer Price Index inflation data coming at 8:30 a.m. ET on Tuesday, and then the Producer Price Index coming Thursday at the same time.
I’ll cover all that and more in this morning’s “Premarket Must Watch” video!
Roger Scott
Roger Scott Trading
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