The Nasdaq just dropped over 8% in four days.
Gianni Di Poce says it is too late to panic. The conditions for a bottom are already here.
Here is the tell almost nobody is watching. The dollar is not ripping higher.
In every serious bear market, money floods into the dollar for safety. That bid is missing right now.
The dollar is up against the yen. It is down against the euro. There is no concerted flight to safety taking place.
To Gianni, that single fact reframes the entire selloff. This looks like profit taking rather than the start of something worse.
The Math Behind The Bottom
The selling hit the exact level where buyers tend to step back in.
The Magnificent 10 now make up over 40% of the S&P 500. Today those stocks simply retested the support they broke out from in late April.
Gianni saw the identical setup at the March low this year. Buyers defended it then. He expects them to defend it now.
Then there is the sentiment data. Record put volume hit the S&P 500 and the QQQ on Friday.
Traders rushed to buy insurance after the damage was done. Gianni’s point is blunt. You have to be positioned before the move.
What Gianni Is Watching Next
Inflation numbers land tomorrow. A hot print could pressure the Fed before the midterms.
Gianni thinks the market may have already priced it in. Crude oil is falling. Bonds are bid. REITs are rallying hard.
Here are the key levels and signals from tonight’s video:
- The Nasdaq dropped over 8% in just four days, less than three months after the last double digit correction
- The Magnificent 10 make up over 40% of the S&P 500 and just retested their late April breakout support
- Record put volume hit the S&P 500 and the QQQ on Friday as traders bought insurance too late
- Crude oil is targeting $75 to $80 a barrel, a tailwind Gianni expects heading into the midterms
- REITs are about to close at their highest level in a year and a half
Professor Bierman put it best this week. “The momentum is broken. The trend has not.”
Gianni is hunting the high beta names coming on sale. He flagged healthcare as the space with his full attention right now.
