A Key Reversal day is when the market or stock starts in one direction and then reverses to go the opposite direction by the end of the day. Ideally, it breaks through a support level to give a clear indication that the trend is changing.
Today July 27th we started pretty strong with earnings playing the biggest factor driving the market higher within the first 15 minutes of the day.
The markets spent the morning digesting earnings and trading sideways, but post lunch… the market started it’s selloff.
Nasdaq 100 took out several days of lows making an impressive counter trend move. Expect the bulls to try to push this back up to a neutral… “all is good…nothing to see here” territory. Other earnings will continue to influence this move as well. If bulls don’t throw enough support expect some air pockets where we may fill some gaps to the downside!
Option traders…expect a increase in the VIX off of historical levels. Even if we rally back to neutral on day, the threat of downside with get volatility sellers a little nervous!
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