Stocks dropped hard over the last 36 hours, but the buyers stepped in and aggressively bought the dip mid-session yesterday.
On the surface, the price action felt exciting. But the reality is that Tech Stocks had slammed into resistance at the top of the upwards channel they’ve been forming over the last four weeks (blue lines in the chart below). And try as they might, the bears failed to get the job done… price didn’t even drop to test major support (red line in the chart below).
Even massively overvalued companies like Shopify (SHOP) didn’t break their first line of support (top red line in the chart below). The uptrend remains clear. And this is on a stock that is up over 300% from the lows!
Moreover, the VIX failed to break out of its falling wedge formation (blue lines in the chart below) and fell back below resistance (green lines in the chart below).
If we are going to get a significant drop, bears need to step up today or tomorrow at the latest. Otherwise we’re going to new highs.
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Chief Market Strategist
Phoenix Capital Research