📈 SigmaTrader Blog

 Over the last few days, as the market attempts to bounce and push higher, the trading volume has been declining, indicating that the price action lacks strong support. Next Friday marks a major options expiration day, which could lead to increased market volatility. Be cautious with your long positions, as heightened volatility may return in the middle or later part of next week.

As you can see in the screenshots below, the Nasdaq 100 ETF ($QQQ) sold off by more than 10%, and the S&P 500 ETF ($SPY) sold off by more than 5%. Is this the start of a bear market or just a correction? First, let's discuss how this all began on July 11th. What triggered this sell-off? On July 11th, economic data was released, including a negative CPI report. This may have led smart money to decide it was the top, anticipating rate cuts that the Fed was late to implement. This caused a significant sell-off on July 11th, followed by a brief pullback and another sell-off, as observed in the screenshots. Then, on July 24th, another significant economic event occurred: the PMI came in under 50, which is a major warning sign. We all know that when the Fed keeps rates high for longer than needed, a recession often follows. Even if they start to lower rates, it may not help immediately. You can check all these charts  here The next big hit was due to the Initial Jobless Claims, which...