Karpel’s Corner: How Low Can They Go?

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The bears have recently taken control in the Large Caps ($SPY, $QQQ), but a pullback of just over 1 percent does not make a correction.

The Small Caps ($RUT), on the other hand, have cracked–dropping by about 3 percent and continuing to make lower highs and lower lows. Now, at this stage this is a pullback in a larger uptrend, but this needs to be respected.

We talked about the potential impact of all the data this week on Tradespoon Live TV,  but the S&Ps are pricing in a potential move of ~$43. A break in the $SPX of 1950 would be technical break that would signal a test of 1900. If we hold at these levels, then this looks like a new support level going into a potential bounce area.

The next report to watch this week is ADP. From there, we will see how this could play out in the employment data at the end of the week.

See you next time at the Corner!