My personal belief (which does not really matter) is the market was looking for a reason to pull back and finally found one! One never knows what the catalyst will be that breaks the status quo. In this case, it is the threat of higher tariffs with China.
To remind myself of how this normally works, we will likely test the bottom once or twice before a meaningful upswing resumes. Don’t be surprised by quick reaction rallies followed by additional stabs down as the market looks for a bottom. Of course, it may not work that way. This is a completely artificial situation like what it was in April and could just be a V shaped move. Either way, use hourly charts to make decisions.
The Net NHNL is below -1000, which is where I start looking for a reversal of the market to go aggressively long. Given how fast this dropped, I will need to be diligent and not get greedy too quickly.
There is likely some more downside movement to follow. As always, just take what comes and act accordingly. The shorting strategy I am testing is working really well. It should have some pretty strong results until the market turns positive. In the meantime, risk management is really important.
