As mentioned on Saturday in the Weekly Compass, “A temporary relief spike on Monday is possible,” and that is what the price action presented today.
The reason is simple: short-term timeframes were extremely oversold. As usual, the levels played a critical role today. Price action revolved around the Central Daily Level of 7,431, attempting to move north, but the CWL provided to our premium subscribers acted as precise resistance.
Price action printed an inside candle for the $NASDAQ 100(NDX)$ and key ETFs like $iShares Russell 2000 ETF(IWM)$ and $VanEck Semiconductor ETF(SMH)$ . Inside candles reflect market uncertainty with neither side establishing clear directional control. We will study below how to navigate them.
The market presented a mixed appetite across growth, energy, and cyclical sectors. Theoretically, it is bullish when the technology sector leads the day, with $Technology Select Sector SPDR Fund(XLK)$ gaining +2.2%, followed by energy ( $Energy Select Sector SPDR Fund(XLE)$ ) at +1.1% and discretionary ( $Consumer Discretionary Select Sector SPDR Fund(XLY)$ ) at +0.5%,
However, clear indecision persisted when checking their respective charts. On the downside, sellers showed true conviction, printing long red candles in materials $Materials Select Sector SPDR Fund(XLB)$ -1.3%), real estate ( $Real Estate Select Sector SPDR Fund(XLRE)$ -1.5%), and utilities ( $Utilities Select Sector SPDR Fund(XLU)$ -1.9%).
This highlights an ongoing internal debate between growth and defensive positioning, with no clear, unified direction yet.
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