Trading System Signals on May 16, 2022 - Market Pattern of Divergent Indexes from Highs to Lows

50K Portfolio 1 Micro SI 25 (LIVE) = -$650

200K Portfolio 6 Micro SI 25 (LIVE) = -$3,900

1 out of 3 S&P strategies were profitable

2 out of 7 Nasdaq strategies were profitable

The stock indexes moved back and forth between highs and lows. It is one of the more challenging patterns to trade. We are in a pattern lately where we lose early in the week and make gains back later in the week. We are also seeing continued dip buying and catching the falling knife.

During this entire bear market cycle, I haven't seen real bear market sentiment. There is still a smug bullishness that this is just a pullback. From a sentiment perspective we should go lower but from a liquidity and technical pattern perspective, it looks like a bounce.

The Fed has only talked Quantitative Tightening so far with no real action, raising the Fed Funds rate only 0.5% so far and increasing the balance sheet by $2 billion last week.

If they do what they say they are going to do, this market is due for much more selling in my opinion and the sentiment will turn more bearish.

The VIX was down and the indexes are in a short term continuation pattern from Friday. We are flat at the end of the day and I am always up for a strong bear market bounce. I wouldn't be surprised to see a 1000 point bounce in the Nasdaq.