The markets have started this week off with two consecutive down days, but neither closed on the lows of the session. We are seeing some bearishness out there, but no conviction to the downside just yet. The volatility has also been weak, staying below 15 and closing below 14 over the last two sessions.
The markets have yet to test support levels and are still showing more of a sideways pattern than a bearish pattern. If support is tested, then we will be able to look closer at directional setups. Remember, the markets can bounce off of support as easily as it can break below it. Where the markets go from there will depend on the sentiment of the markets once it is tested.
Keep an eye on the VIX – without volatility, we shouldn't expect a move lower to last. We could see more sideways movement, so don't be too quick to abandon sideways positions just yet.
See you on Wednesday's Mid-Week Trading Room Update class!
Have a great night,
Your Maverick Trading Team
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