Loading ...This Is Textbook Topping Action: Will Dip Buyers Jump in Monday Morning?
Let’s see if there’s some follow-through to the downside early next week, which may be something of significance.
By James “Rev Shark” DePorre
March 8, 2024 at 4:30 PM EST
That news could have been a good excuse for a strong move, but market participants remained focused on the price momentum generated mostly by the semiconductor sector (SMH) and Nvidia (NVDA). The action was downright frothy on Thursday. It appeared to be a buying capitulation, with some folks deciding they would forego their reticence to chase these names that seem to go up every day.
That looked like a smart decision on Friday morning as the market had a positive reaction to the jobs news, but there was a very sharp intraday reversal that changed the market mood. Nvidia went from a new all-time high of about $974 to a low of $865 very quickly, and many technology names followed with nasty reversals.
The good news is that breadth was just slightly negative, and the mighty Apple (AAPL) finally bounced after a seven-day losing streak. There was a big supply of new 12-month highs also before the reversal hit at mid-morning.
Technically, this is textbook topping action—buying capitulation, followed by a blow-off top and a sharp reversal—but it needs some confirmation before it matters. It could just be another opportunity for dip buyers who love to jump in on Monday morning, but if we see some follow-through to the downside early next week, then it may be something of significance.
The good news is that this is no longer a market that is solely dependent on the Magnificent Seven. There is quite a bit of other activity of interest, and some of the best action is in secondary stocks.