9-10-26 Markets Test Key Support | Before the Bell

0:00Because there's a lot of position now getting off sides in the markets, which are actually setting the markets up for a decent reflexive rally here at some points. All we need is some piece of good news, something to break with Iran, better than expected inflation numbers. Something could actually put a pretty decent spark underneath the markets. With that said, let's go ahead and talk about what you know before the bell this morning. The markets, you know, continuing to do what markets have been doing here, three days down, sitting right on that 50 day moving average. We talked about this the other day is that that was kind of that initial target for this pullback. So we're getting very close to that. We're not extremely oversold, but we're getting oversold enough for amounts. And we may see that today, if PPI comes in better than expected today, we can certainly see amounts of the markets that wouldn't be surprising after the after kind of the recent pullback. Overall though, the market just remains within that consolidation that we've talked about, that range. We haven't broken out of that at all at this at this point. Again, we're sitting, you know, moving averages are coming up that's holding support

1:01right below the markets. Momentum still remains on a sell signal. There's certainly some downside pressure in the markets. And September is we've talked about before. It tends to be a weaker trading month anyway. And so far, September has certainly kind of lived up to that expectation, but it doesn't mean there's got to be a drastic sell off by stretching the imagination as well. I'm not saying there won't be. Again, if these reports come in a lot hotter than expected, we could certainly see a test of the 100 day moving average, which would put us closer to about 7550 on the index. And that would really kind of be the next key level of support. And then beyond that, if we break through that level, we're going to be talking about these lows that we were setting back kind of in mid July. And that's going to be around 7400 ish. So there is some downside risk, 3, 4% in the markets based on kind of what happens here over the next day or so, and expectations about Fed, Braid Hikes, etc. But again, also on the other side of that, that consolidation, as I said, has been working off some of this overbought condition. So any type of good news could certainly elicit some type of rally here as well.

2:03So this is what I'm saying, be a little cautious with whatever action that you take here. Doing a little bit of hedging is certainly okay, raising a little bit of cash is fine. But I wouldn't do anything really drastic here because this market could really break in either direction. And again, typically markets do exactly what everybody thinks it won't do. There's a lot of bearish bets on the markets right now. Hedge fund positioning and tech stocks has gotten decently oversold. So there is certainly some catalyst here for a move to the upside that could surprise investors. So just be a little bit cautious of that. And as I said, I did want to touch on volatility. This kind of recent sell-off has picked up just a bit. And that's kind of expected with a sell-off. But again, that index remains very, very compressed right now in the overall market. And again, complacency remains here to a large degree. We haven't seen a lot of selling pressure in the overall market. We haven't seen a lot of Exodus again.

3:04Market, this market kind of pullback has been very mild. So volatility has come up just as smidge, but it's certainly not warning of anything more dramatic. Now that could change again today with this PPI report this morning. In the CPI report tomorrow, this could all change very quickly. So again, just be a little bit cautious, a little bit of extra cash here. Certainly wouldn't hurt. But again, just kind of keep your positioning very stable at the moment. All right, that's what you need to know before the bell is pointed.