 Hey everyone, this is Mike Kramer of Mock capital with your final check-in of the week today is July 27th And it's about 7 30 New York time So we had loads of economic data today, and we're going to be getting loads of economic data tomorrow Tomorrow we're gonna get the unemployment cost index is a very important index to Fed monitors very closely And then of course we're going to be getting the core numbers Which really at this point matter much more than the headline numbers So the core month over month numbers were looking for zero point two percent Down from last month's reading of zero point three and year over year we're looking for four point two Versus last month's reading of four point six also I'll point out that this University of Michigan number five to ten year inflation outlook very important number as well The preliminary number in July which comes in the middle of the month was three point one percent estimates are for to go Back to three point oh percent it's a very important reading because if you get another three point one number Probably not a big deal but if you were to get a number that were to be slightly higher than Three point one if you were to get a number higher than three point one that would be a big deal because we haven't had a reading above 3.1 percent this entire time so anything above three point one percent would probably catch the feds attention and something that they would probably Be a little bit concerned about given that these inflation Expectations which have not gone above three point one percent this entire time are now suddenly going above three point one percent Again, this number is also sort of correlated with prices and gasoline because these are things that people see on a regular basis As well as things like food So this is something to be mindful of and just to watch because obviously this number comes in higher than three point one for some reason Again, just letting you know that it could result in rates, you know sort of seeing some volatility Today was a volatile day of trading in the SMP. You can see we start at the day higher Finished, you know below, you know, we basically sold off all afternoon following a very weak auction at one o'clock for the seven-year treasury and then of course a little bit later in the day We received word for that the boj may considered adjusting its yield curve control policies at today's meeting and That sent the markets lower because the end strengthened materially. So if you're a bull At this point, but this looks like a really difficult Situation to be in because number one we gap tire It almost looks like an exhausting gap Then we were to proceed it to sell off all day And not only did we sell off all day, but we finished below all the lows of the last three days and That could be viewed as a sign of Support breaking so you can see here that the low on the 24th was 450 4541 today's low 4528 the low on even Friday 4535 again 4528 so you'd have to go back to Thursday, July 20th a full week 4527 56 and we barely Just barely missed that so This was a very weak day in the market given that change now There's a couple of things to point out here again number one We close below all these prior lows very very negative number two This is a bearish engulfing pattern not only is it bearish engulfing for yesterday It's also for the day before and the day before that Number two or three you can call this a reversal top with again moving above all the prior highs And then closing below all the prior lows. So this is overall just a very very negative pattern Now clearly you need follow-through tomorrow for this to actually mean anything And ideally if you're a bear you want to see a very sharp gap down Below these levels and then just continued selling and then you can start thinking about Breaking 4500 and starting to fill some of these gaps down to 44 35 The bulls have a much harder task ahead of them But given the way this market is functioning more recently anything is certainly possible This is a very this is just a straight line, you know sell off into the close What the bulls need here most importantly is if they actually want to try to maintain momentum and make all today's pain go away is they need to Basically get this market to gap higher and then take out this high very quickly If you can do that which is a pretty tall order at this point if you can do that Then I think the bulls can save the rally that we've seen more recently And this rally can resume higher and you could probably take out this high at 46 6 4606 To do this probably going to be difficult But again if the bulls want to try to make an attempt at this you need to see it rally You need to see a gap higher. You need to see this taken out fairly quickly Otherwise, you're probably looking at a scenario where this may prove to be the high for some time Again when you look at the the the RSI here you can see clear divergence In fact, you know the RSI has been trending lower for a multiple of days Basically since the middle of June the other thing that we could point to and look at here When we just look at some patterns number one, here's your trend line You have what appears to be is a rising wedge that clearly was broken pretty sharply today Again, typically when you see rising wedges and they break you typically return to the origin Which was just maybe longer term. We're looking at dropping back to below 4400 Certainly not the end of the world by any stretch of the imagination But that's what we're looking at right now on the S&P and of course you can see here also 4525 is a support level So again, this level breaks quickly tomorrow You're talking about the potential to start filling gaps and returning down to this origin at 4400 The bulls have a much harder task in front of them again You need to really be able to take out this high fairly quickly Probably within the first half an hour the trading session for that to for this for this bullishness of the last couple of days and weeks To really extend higher. That's what you're looking at here If you want to challenge at least as high of 4606 the Nasdaq is also offering some more Signs that suggests that there's probably some more bearishness along the way The reason being again, you see the same pattern here Nasdaq gaps higher basically Gaps almost two percent higher actually when we look at the Ndx and we look at the opening print you can see it was up 1.71 percent just on the close and it had been up more than that So you gap open and then you basically just sell off all day long and Again the scenario here not as bearish as the S&P given that you managed to close above all these prior lows Also from a from another standpoint that you actually held these lows, which is important at 15,400 or so Clearly this is a level of support That level of support needs to hold if you want to see the Nasdaq continue to move higher here You can see 15,400 goes back to here the Nasdaq attempted to fill the gap today and it didn't quite get there all the way Again, we talked about this the other day with meta The gap could be considered partially filled or filled depending upon how you like to look at it I usually like to see it filled a completion meta actually did fill the gap completely today from back in From the gap back in here You can see that when we look at the look at meta you can see it filled that gap completely and failed And so that's an important distinction right is that you didn't have that happen yet today So it leaves open the possibility that there could be some more upside here again The the key here is that if you're a bull you really need to start you need to take out this high pretty early tomorrow To get the momentum needed to probably take out this high Otherwise what you're looking at here is a situation where you have the S&P Trying to make new highs and you have the Nasdaq making lower highs And you have them both sitting on pretty critical support levels and that's a divergence in the marketplace And that's something to be mindful of because you have two more two of the major markets One's leading in one sort of following in this case the Nasdaq's been the leader this whole time the S&P 500 it's been sort of being dragged along given the makeup of the index and that's and That's and so that the the move lower in the Nasdaq the failure to make a new high is bearish in my opinion Again, this is the big level because if you break 15,000 call it 400 for rounding sakes, you know, you're talking about one gap here 15,300 then you're talking about 15,100 and then you're talking more about below 15,000 again, so this is a big level here at 15,400 it could lead to significantly lower prices The other thing too here is that you see on the RSI again making lower highs. Also, you can see here RSI momentum Broke the uptrend tested it today failed. So again, this is sort of a bearish setup here on the Nasdaq When you look at the Dow, so the Dow as we've talked about all week It was due to eventually go down and that happened after 13 consecutive days hires Most importantly again the Dow that overbought that's come back in When you look at the Dow, there's not much to really gather here at this point Other than the fact that you have this one big trend line off of the starting point on July 7th and That broke could be a signal that the rally is over again Here you can see your support region in this area 35,200 then you're talking about lower levels again Here in the Dow and again if you're a bull, you know, what do you need to do? You need to really take out these highs very early in the day to keep the momentum you've had I think the longer the but all these three indexes stay within this trading range of the past day The more likely it is that the sellers are going to start. I've had some really big gains Maybe I should take some profits That's certainly a scenario that could begin to develop. So I think again This is a very tough spot if you're bullish because you need to take out these highs I think relatively quickly for it to negate what happened today I think today was a pretty bearish day in the market. You also had you know, again Just like we talked about on the S&P. You had a you know a bearish engulfing day where you had a higher high 35,645 35,633 close below the Finish below this high you did it actually for the last three days. So two days So again, this is just a bearish look. It's a bearish setup This could be a very big reversal turning point when you look at the NDX It doesn't have that engulfing pattern But again, you're sitting on really key support levels here So if you're a bull, you need to see this sort of decline today be washed off really quickly You need to see the bulls take charge very early. You can see also here We finished we're below the 10-day exponential moving average again on the NDX So again, this is a pretty critical spot You can see the S&P hit the 10-day exponential moving average and bounce right off of it So, you know again, you keep moving a little from here You're gonna get sell signals because you're gonna be below the 10-day you're gonna be below support So again, if you start off the day with more weakness I think you can expect to see more weakness ensue in the days ahead and That's where we are at this point. Anyway, have a great weekend, and I'll see you soon. Bye