17Dec10:43 amEST
A Defined Holiday Scene in Place
Despite persistent weakness in some iconic banking houses, like Goldman Sachs, as well as in the small caps, and in addition to recent stalwarts finally getting hit this morning (such as TTD ZS in software), the ETF for the top 100 stocks in the Nasdaq Composite Index is at least offering up a defined line in the sand headed into Wednesday's FOMC.
On the QQQ ETF daily chart, updated below, we know bulls simply must hold that lower light blue line as bonafide support, roughly the area below $159, in order to have any kind of chance at knocking out a Christmas/New Year's bounce. That has not quite happened thus far, as least not for more than a few moments, which means the burden still falls on them to prove it.
And that goes double when you consider this is a jam-packed macro week of data, including the FOMC events Wednesday afternoon, on this final full trading week for 2018.
Furthermore, failure to hold a falling channel pattern in the context of a correcting market, such as this one, often leads to fast moves lower, putting even more of a premium on bulls stepping up to hold this spot.
As I write this, the XLF, ETF for large cap banks like GS, is flipping green again. I strongly suspect an upside reversal in banks today could easily ignite some pre-FOMC short covering in the broader market, too.
On a side note, two pot-related stocks are still distinguished: CRON (the MO investment does not hurt) and NBEV, the high beta beverage/CBD play.
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