A sustained move under the 50-day MA will signal increasing selling pressure. This will put the swing bottom at 24980.38 on the radar. This price is the trigger point for an acceleration to the downside. The primary objective of this bearish move will be a 50% to 61.8% retracement zone at 23940.23 to 23173.24. Inside this zone is the 200-day moving average.
Recovering and sustaining a rally over the 50-day MA will indicate the return of buyers. There first objective is to overcome and sustain a rally over 26346.05.
Trader reaction to the 50-day MA at 25676.57 will determine the direction into the close on Tuesday. A close below it will open the door to further selling pressure on Wednesday. Holding above it could fuel a late session recovery rally, but not necessarily a higher close. What we should know by the end of the session is how investors view the importance of the 50-day MA and its impact on the trend.
What to Watch
Micron reports Wednesday after the close and the timing could not be worse for the bears or better for anyone looking to buy the dip. The SOX just dropped 6.3% and memory names led the damage. If Micron’s numbers show AI-driven demand is still running, Tuesday’s chip selloff starts looking like a gift. The bargain hunters who showed up in mega-cap tech Tuesday were not afraid to buy the dip and they will move into chips on a strong Micron print.
The 50-day moving average on the Nasdaq Composite has held every test since April. Tuesday’s session drove through it for the first time. Whether the index closes above or below it by the bell is the difference between a shakeout and a trend break, and the market will know before Wednesday’s open.
More Information in our Economic Calendar.
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