Key Support Levels to Watch
Key supports held on Monday. QQQ held $700, SPY held the 100-day SMA, and SOXX held the 200-day SMA. Those are the levels to watch. If they start breaking, especially with a gap below support, we could see some quick selling down to the next level.
QQQ’s next level of support is the 200-day SMA.
QQQ Daily Chart
SPY’s next level is $740, where we have the AVWAP from the March lows lining up with horizontal support.
SPY Daily Chart
SOXX is a little sketchier from a technical standpoint. I don’t see another solid level of support until $370. That’s because it moved more than $100 in April in just 12 candles, leaving very little structure underneath the current support.
SOXX Daily Chart
TQQQ is also worth watching. It trades at about 3x the intraday moves of QQQ and is sitting right at its 200-day SMA. A break below that level would line up with QQQ losing the key $700 support. TQQQ’s next key support is around $58, which is an area where I’ll look to take profits on short-term puts and add some longs.
Patience Into Earnings and the FOMC
With key earnings from the hyperspenders and the FOMC meeting this week, its ok to take a step back and waiting for more data. Will you possibly miss the exact low? Yup, for sure. But if this turns out to be a durable low, there will be plenty of time to get back in and plenty of upside left.
There’s real value in having the peace of mind that comes with not buying unprotected into major binary events like earnings and FOMC announcements, especially when none of us has any idea how the market will react.
I’ve added into this current support, but if we start taking out the levels I outlined above, the risk increases that we could be entering some kind of 2018-style liquidity event.
QQQ 2018 Analog
I know a lot of stocks are already very low, especially in the high-beta and AI space. But when liquidity events start, oversold doesn’t matter. People just want out, and fear takes over.
I’m not hoping for anything nearly as dramatic as 2018, but I wouldn’t mind a little more selling to fully reset sentiment and set us up for a nice bull market into 2027.
As always, I’ll be watching the key levels and hedging when they break. There’s still a real risk of further selling in a lot of these charts, and the macro picture isn’t helping.