From it’s high of 31.63 just seven days ago, the Qs have dropped more than 10% as of yesterday’s close. This morning the market is set to open lower and below the larger level of support we have been watching at 28.50. Is is going to be the final death spiral of this move or is it sucking in shorts on “news” in AAPL? Who is left to sell their long positions at this point? It doesn’t seem like we can blame hedge fund unwinding any longer. When you get involved in the markets always ask these 2 questions first.
1- where has the market come from?
The Nasdaq has dropped 10% in seven days, it is getting extended to the downside.
2- where does it have the potential to go before there may be an offsetting source of supply or demand?
28.50 is a major level. It is not uncommon for a breakdown from extended levels to flush the stubborn longs and suck in fresh shorts just before a powerful counter trend rally begins.
Right now there is ZERO EVIDENCE that we will experience a turnaround, but it is a possibility you need to be open minded to as the market becomes more deeply oversold.