The markets made a strong move lower today – the first that we have seen in a while. All three majors gave back more than -1% today, with the Nasdaq closing down over -1.8% on the day.
The VIX moved higher, but didn't manage to break above 13, settling at 12.50. This doesn't mean that the bearish move is over and that the markets are due for a change of direction here, but we have seen the bulls answer days like today in the past.
Don't be afraid to add bearish plays here, since today's range and volume both show promise to some bearish follow-through over the next few days. However, do not abandon the bullish side just yet. Although we did close below support levels, they are minor support levels overall. Keep in mind volatility's effect on option premiums and be patient with your limit orders...don't chase trades!
See you on Wednesday's Mid-Week Trading Room Update class!
Have a great night,
Your Maverick Trading Team
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