Downside Risk outweighs Upside Potential

We are 3 trading days into the week and let us take stock of where we stand on the trending of the markets.

Major Markets

More weakening is seen everywhere except for the IWM. The QQQ looks the worst as the price has fallen below its 50-day SMA. That is considered somewhat significant. It is safe to say that downside risks outweigh upside potential at this time.

SPX Sectors

XLV and XLE have been strong while the original highfliers have been weak. But generally, a weakening situation.

Magnificent 8

Here is how the performance looks like for the week so far (along-with the expected moves from the start of the week for the week):

TSLA and NVDA have been the biggest losers so far this week.

Interestingly the VIX is back again below 16 which tells me that everything is very orderly so far. It has been hovering in this 15 - 18 range for several days now. Tomorrow, we have some important economic news coming pre-markets. Let’s see how that goes.

Note I am positioned short but only a small position as of now.