Fund managers sold tech stocks for 8 consecutive days through June 29. The largest selling volume in a decade.
Then the algorithm reversed everything in 24 hours.
The semiconductor ETF made a low on June 16 around 590, another low on June 24 around 586. On June 29 it broke below both, dropping to 571. Right when everyone had finally capitulated and sold, price reversed and ran straight back to 599.
People paid millions of dollars to manage that fund. And they got swept by a false breakdown anyway.
Here is the lesson worth extracting. A false breakdown below a major support zone followed by a sharp reversal is one of the cleanest signals in trading. It means the sellers are exhausted. Once the last weak hands capitulate, there is nobody left to push price lower, and the next move tends to be sharp in the opposite direction.
The probable target now sits in the 640-660 zone, with 700 as a stretch target. Fund managers who just got stopped out are demoralized and unlikely to sell again soon.
Meanwhile retail sentiment sits near extreme fear according to the CNN Fear and Greed index. At the same time the Nasdaq Composite is making new all time highs, the Dow hit a high last week, and 65% of S&P 500 stocks trade above their 200 day average.
Fear and record highs do not coexist by accident. One of them is wrong, and it is rarely the price action.
Professional fund managers getting trapped by this pattern is almost funny. Retail investors falling for the same trap repeatedly is not a coincidence either. It happens because decisions get made with emotion instead of with a defined risk to reward framework.
If the professionals with millions in fees still get swept, what makes you think your gut feeling is more reliable than theirs? #币安
Then the algorithm reversed everything in 24 hours.
The semiconductor ETF made a low on June 16 around 590, another low on June 24 around 586. On June 29 it broke below both, dropping to 571. Right when everyone had finally capitulated and sold, price reversed and ran straight back to 599.
People paid millions of dollars to manage that fund. And they got swept by a false breakdown anyway.
Here is the lesson worth extracting. A false breakdown below a major support zone followed by a sharp reversal is one of the cleanest signals in trading. It means the sellers are exhausted. Once the last weak hands capitulate, there is nobody left to push price lower, and the next move tends to be sharp in the opposite direction.
The probable target now sits in the 640-660 zone, with 700 as a stretch target. Fund managers who just got stopped out are demoralized and unlikely to sell again soon.
Meanwhile retail sentiment sits near extreme fear according to the CNN Fear and Greed index. At the same time the Nasdaq Composite is making new all time highs, the Dow hit a high last week, and 65% of S&P 500 stocks trade above their 200 day average.
Fear and record highs do not coexist by accident. One of them is wrong, and it is rarely the price action.
Professional fund managers getting trapped by this pattern is almost funny. Retail investors falling for the same trap repeatedly is not a coincidence either. It happens because decisions get made with emotion instead of with a defined risk to reward framework.
If the professionals with millions in fees still get swept, what makes you think your gut feeling is more reliable than theirs? #币安