Stock Market Today, Stuck in This Range
After the inflation announcement, the stock market continued its downward trend from earlier this week.
Those who followed yesterday's Nasdaq technical analysis knew we expected price to drop and test lower critical levels. Following that dip, buyers brought all the main indexes back to the top, as seen in the video below.
Trading ranges are characterized by a "tie" between bulls and bears. As such, it's a day of long-term consolidation.
Ping-pong-like price action. When prices rise, long traders sell and leave their positions rather than adding to them. Short sellers will seek fresh positions. When the price reaches the bottom of the range, short sellers will buy to finish their shorts and fresh bulls will start new longs. Traders don't think stock market movements will continue, therefore they depart and gamble on a reverse.
Those who followed yesterday's Nasdaq technical analysis knew we expected price to drop and test lower critical levels. Following that dip, buyers brought all the main indexes back to the top, as seen in the video below.
Trading ranges are characterized by a "tie" between bulls and bears. As such, it's a day of long-term consolidation.
Ping-pong-like price action. When prices rise, long traders sell and leave their positions rather than adding to them. Short sellers will seek fresh positions. When the price reaches the bottom of the range, short sellers will buy to finish their shorts and fresh bulls will start new longs. Traders don't think stock market movements will continue, therefore they depart and gamble on a reverse.