Friday was a brutal day for the stock market, with heavy selling across the board. The S&P 500 ($SPY) and Nasdaq ($QQQ) got crushed, and many top tech names broke key support levels.
Is this just a one-day shakeout, or are we about to see a bigger correction? Let’s break it down.
Market Overview: What Just Happened?
- China COVID Fears triggered algo-driven selling.
- Big Tech stocks collapsed—Microsoft, Google, and Tesla all broke key support.
- Semiconductors and AI names got smoked—MU, AMD, and NVIDIA all down.
- Momentum plays rolled over—Palantir and other high-flyers took a beating.
Key Levels to Watch in $SPY and $QQQ
-
S&P 500 ($SPY):
- Testing the 50-day moving average—will buyers step in?
- If we break below, watch for 520 as the next major support.
-
Nasdaq ($QQQ):
- Also sitting near support, but still not fully oversold.
- Needs to hold 430—otherwise, next stop is 420.
Best Trade Setups for This Week
Top Short Setups (Bear Flags Everywhere!)
-
Microsoft (MSFT)
- Flat-bottom breakdown—breaking key support.
- Trade Plan: Short below $405 for a move toward $390.
-
Google (GOOGL)
- Bear flag breakdown—showing serious weakness.
- Entry: If we gap up and fade, short under $140.
-
Tesla (TSLA)
- Trend is clearly down, breaking key levels.
- Setup: If it breaks $330, we could see a big move down.
-
Meta (META)
- Finally showing weakness after weeks of strength.
- Trade Plan: Look to short pops into resistance.
Potential Bounce Play (Only If It Sets Up!)
- Amazon (AMZN)
- Oversold rubber band setup—sitting at key weekly support.
- Trade Idea: If it gaps down to $210, look for a quick reversal trade.
- Only go long if we see clear buying action.
Avoiding Fakeouts: How to Approach Monday’s Open
🚨 If we gap up Monday morning…
- Watch for failed bounces—resistance levels could reject stocks lower.
- Look for short entries in weak names like MSFT, GOOGL, and TSLA.
🚨 If we gap down…
- Look for Amazon as a potential bounce setup.
- Check for support holding on $SPY and $QQQ.
Pro Trading Tips for This Week
- Be selective—don’t try to catch a falling knife unless you see real strength.
- Stick to high-probability setups—short bear flags, play clean bounces.
- Wait for confirmation—if the market gaps up but fails, fade the move.
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