Stock Markets in major correction - key support levels to watch for downside action

hello everyone and welcome to today's video today is the 16th of february 2022. i wanted to provide a quick update on the status of play for some of the key indices and stocks at the moment today's a big day we've had the retail sales in earlier today which came in very hot compared to expectations and we've seen the market selling off in expectations that the rate hike for march is very probable but we also have the fed minutes coming later today as well so we could well we're very much in a standoff at the moment waiting for the fed minutes to be released to see what direction we see for the rest of today's trading day i've got this by the spy which is the s p etf some of the key things that i'm looking for at the moment we're in and amongst a um major correction at the moment so we saw a uh a 12 and a half percent almost correction uh earlier in the year where we bought them on the 24th january and that correction is not over in my opinion i am seeing very much a sideways to downwards move for the rest of this year possibly even going into next year spanning about 18 to 18 months maybe even going as far as two years so just be aware that uh we're not in the long term uptrend that we we've seen since the pandemic hits we are still in an uptrend but there is going to be sideways to downwards action for a considerable amount of time so expect lots of volatility and lots of choppy action so in terms of what i'm looking at in the near term i've got uh key resistance levels we've got this trend line here this gray line here so that's minor at this stage we've broken this um the this is actually a weekly level so if you're looking to this line here you're sort of looking at least the daily level to break above or below and possibly really looking at the weekly level on this so you can see it's acted very well in terms of support here a few days ago and also as resistance and not too long ago and you can see it was resistance earlier back in um october of 21. we also have a couple of weekly levels here uh 453 42 and 448. 92 i do think that this level here will be reached possibly even pierced this week uh it doesn't look very likely at the moment but um you never know what happens when the fed minutes get released this level here is possibly less likely but that's a major level there on the downside in terms of support we've got the six 61. 8 percent retracement level here to be honest i think this is very minor at the moment we've come very close to tagging that already earlier in the week and on the futures we already we actually hit the 618 um retracement already so i think this is very much minor this will break so the next level we have is this level here 42 428 64. and then we have a couple of minor levels down here in the 422 range which um we might get a double bottom or not far off a double bottom we could even pierce the double bottom in the near term and we might get a bounce back off that but uh if these levels here break the next level down that there are some likelihood that you'll see some bounces along the way but the major line i've got is this trend line here currently sitting at around 39 let's say 391 that level could pierce but uh depending on the volatility and how quickly it gets there it could just get a very quick bounce and i don't expect markets to correct further than that at least not uh not in the near term so you're looking at about a 18 and a half percent correction and that could well be the lows for this major correction that we're seeing uh we could even see a double bottom or even a slightly lower move later in the year but for now i don't expect to see anything lower than that if we take a look at the oh sorry if i go back to the spy on the short term we've got this line here this key pivot and you can see it's been holding fairly well yesterday we've been below it all day today so this line for me in the very short term um is very pivotal this will kind of

dictate where the market is heading but you can see we're in a consolidation mode right now waiting for the fed minutes and we'll know shortly which way it wants to break and we that may not be until tomorrow uh often you'll get a knee jerk reaction today and then the markets will decide overnight or tomorrow what they want to do going to the qqq which uh tracks the nasdaq this is the nasdaq etf so we've got a few things here um the fib retracement really is irrelevant at this point uh that's going to none of these levels are going to hold you've got this trend line here we could see a move back up to that at some point i'm not expecting it in the near term but we could see that but the major levels that i've got in terms of supports are at the 342 and then the 338 down here and similarly to the s p the spy we've got this big trend line here and i think that this should contain any downside action and that's around a 24 and a half almost 25 percent fall from the highs now the nasdaq has been weaker and this is really all around moving out of high risk tech stocks and into more safer assets that are not overvalued if you look at a lot of the stocks in the nasdaq they are very much overvalued especially stocks like amazon tesla netflix and you've already seen big falls in some of these stocks but uh apple for me is a big one and i'll come to apple in a little while as soon as we see some down major down uh breaks of key support levels you're going to see much more downside to the nasdaq and the nasdaq has been weaker it is likely to actually bottom earlier than the s p and the dow eventually i'm talking much longer in the future possibly march possibly into this month but even when we look at later in the year but for now we should see everything being contained to the downside around this trend line uh if it gets there on the dow we have uh two key areas we've got this 35 600 area and then we've got the 33 250 area this could get a bounce at double bottom here um and then after that we've got this trend line down here now this could pierce but the dow has been holding up very well and unless if there's a big change in the attitude towards risk uh the dow should hold up fairly well but if money starts to flow back into the tech stocks then the dow will likely see some downward action so the next thing i wanted to look at was bitcoin um so just a couple of things i wanted to mention actually i have got a a short on the s p 500 on the futures actually which i think i entered um on this day on the 10th of february right very close to the highs and i've actually got a stop in place um at around for i think it's around 475 area something like that or not but on the futures so i think it's um i've got the futures up here but it's um at around seven like uh yeah so it said um i was then entered the futures at uh 4573 and i've got a stop you know around 4555 at the moment similarly on the nasdaq i entered a short a few days ago and i think it was around here somewhere 364. so i've um i've got to stop actually above the highs of this the only reason i have i haven't got a break and even stop or stopping the money on this is just because i want to give it a little bit more breathing space it is weaker it shouldn't get there but i just wanted to give it enough room uh because of markets are very volatile and i'm seeing a lot more downside action on the nasdaq so coming back to bitcoin um came in to my level here and i did enter a long trade very i think i entered actually just above this line because uh the bit bitcoin is excellent when it comes to technical trading it really works very well on horizontal and trend line support and resistance levels and i actually went in just above this is a major line this is a weekly possibly even a monthly line so i went

in slightly above this and this was the key area here i haven't actually got the 20 moving average here but the 20 daily moving average sat right around here as well and you've got this big trend line here it's now above this and as soon as it broke through you can see it had a massive update and i am not expecting this to make a new lows it could re-test this trend line here uh but it is holding up very well and if you look at all of the other uh cryptocurrencies they are underperforming currently versus bitcoin and at some point in the next few weeks i do expect the other cryptocurrencies to start performing much better as well one of the key things to look out for is ethereum and once ethereum starts to go and starts to leak bitcoin you're gonna see this uh bitcoin and other cryptocurrencies really start to um to fly but uh ethereum really is the one of the key things to look out for at the moment um but the these uh this is a bit of a minor support area here so is this what sorry resistance area so is this one here but this could contain a move for now but really the big trend line that i'm watching is this one here uh which goes back quite some time but this is uh the one that i'm looking at right now to contain any upside but as i said we could see a move back to this trend line here but really i think bitcoin is holding up extremely well and i'm not seeing it go down any further in terms of really going beyond this or even getting back to this line so i'm actually going to be looking for a good retracement of this current move before entering a second long position the final thing i wanted to look at was apple as i said i think apple is really pivotal here it's held up extremely well it's you know not massively off its um it's all-time highs compared to a lot of the other tech stocks that have fallen considerably especially the likes of facebook um facebook just a quick note on facebook it has fallen considerably uh i think it's down about 40 on the year maybe even more and it's continuing to fall even today now my view on facebook is they are certainly have seen a big change in their fundamentals from ad revenues especially because of what changes apple have made uh in terms of privacy settings but from my point of view they are going to be one of the leaders in the meta universe uh which is obviously what they've renamed uh and rebranded but in that respect i think what's happening is the big trading institutions have seen this as a great way to sell facebook into that news and get everyone selling out of facebook or meta as it's now called and this really is the best buying opportunity for facebook or better to lead into that extremely high growth that is likely to come from the meta universe so a great stop to be investing in at these lows that we're seeing but in terms of apple we really need to break this um line here uh this 168 34 to see some major downs on the daily level you can see how many times it's tested it and it didn't break and then eventually did break but it's now recaptured that and opened up below this the other day which is really funny because i was watching that and i i'm sure a lot of people were probably short unfortunately and you can see that you know that hasn't been very profitable so far now this trend line here is minor this could easily break i'm not expecting it to necessarily go much higher than that good but if we look on the 60 minute there's two key things that i'm watching you've got this trend line here which i think will contain any uh any moves to the upside so this is good resistance and potentially good for watching as options to short but this line here is the main thing that i'm watching you can see yesterday's trading it opened just above it and wasn't able to close below it on the 60 minute and today it opened above it and has so far closed firmly above that yeah so far in the 60 minute now this is what i am watching but just remember this is a 60 minute chart you really want to see some validation of breakage of that not just a single candle but a couple of candles with lower low closes and if you can get a close and then a retracement to that could be a good possible short but you need to watch other factors as well you can't just rely on a single factor to enter a trade for a short or a long position but a solid break below this

and also a break below the daily here would signal some potential good short selling on apple and as i said earlier a break it lower in the qqq the nasdaq as well so i hope that's given you some good insights into what i'm expecting coming soon um in the markets like i said i do expect lower lows than what we've seen already on both the smp 500 and the nasdaq and also ultimately in the dow as well so um thanks for joining me and uh hope to see you soon on trader technicals