Coach Mark here.

Yesterday the DOW was up noticeably while the Nasdaq was selling off. Today the reverse is happening with the Nasdaq up while the DOW is down. Three thoughts on this.

First, this type of sporadic price action in cyclicals (and the DOW) lets us know that there is not exactly a tremendous economic theme driving price action right now. Cyclicals ebbing back and forth in a stagnation type environment is not terribly surprising especially while the Fed is still out there spouting off some version of “we are not quite sure what we want to do next/or when we will do it” level of rhetoric. My brother Matt has said for many weeks now that the “other” areas of the market (referring to non-tech) we remain a tad confused until the Fed provides clarity. They have not done this yet.

Second, NASDAQ bouncing is not a big surprise either. Nothing changed in the AI theme and the selloff has felt more positioning (people getting a little ahead of themselves in their exuberance) than anything else. It will be nice to see if we get some tradable patterns in the area in the coming days and weeks. That is for the short-term but in the long-term I know I am excited to learn a few things in my brothers AI webinar tomorrow night on YouTube! Be sure to check it out tomorrow at 8:30 PM EST on the Tackle Trading YouTube channel.

Third, the last two days for me has been very reminiscent of 2020. I swear it felt like every day the market was choosing one area or another to bid. If felt that there were very few “everything rally stretches” but one constant taking of turns. The net result of that price action was very bullish even if on any given day there were plenty of laggards along the way.

A few thoughts on a Tuesday. Have a fantastic day!

Chart of the Day: Semiconductors (SMH)

Semiconductor ETF SMH holding the 20-day moving average here. If that 20-day can hold there should be some nice setups in semis in the coming days.

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