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Connor Bates discusses why the market is approaching an important decision point after a sharp selloff and a modest relief rally.

#SPX, #QQQ, and #IWM have now closed below their 21-day EMA for a second consecutive session, signaling that short-term momentum has weakened.

While the longer-term uptrend remains intact, with all major indexes still above their 50- and 200-day moving averages, the market is no longer in a clear uptrend.

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A key focus is the relationship between the 8-day and 21-day EMAs.

As long as Friday’s lows continue to hold, the current pullback could simply evolve into a period of consolidation and sideways trading.

However, we are watching closely to ensure the 8-day EMA does not cross below the 21-day EMA, a signal that often marks the beginning of a more sustained trend change.

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$SPX remains below the 21-day EMA, while the $QQQ closed right at that level and continues to trade within Friday’s wide-range selloff candle.

The major technology leaders remain under scrutiny, with several leaders having pulled back toward their 50-day moving averages. The next test is whether buyers step in and defend those levels.

Small caps remain weaker, with $IWM rallying into resistance at the 21-day EMA before being rejected.

The Dow #DIA is approaching key support levels: the 21-day EMA remains significant, while the 50,000 level is a key psychological and technical support area.

Meanwhile, the equal-weight S&P 500 #RSP continues to hold up relatively well, suggesting that market participation has not completely broken down beneath the surface.

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Several important intermarket signals are also flashing caution.

Treasury #bonds #tlt remain weak as #yields continue to rise. Higher yields can pressure equity valuations, while rising rates often create headwinds for growth stocks and risk assets.

The U.S. Dollar Index #dxy is approaching a potentially important technical inflection point, attempting to reclaim the $100 level. A move above $100 could represent a significant Stage 1 base breakout, not good for equities either.

#Bitcoin #IBIT remains under pressure despite a bounce, and #gold #GLD, #silver #SLV, and mining stocks #GDX have suffered notable technical damage.

Gold and gold miners have already fallen below their 200-day moving averages, highlighting significant relative weakness across the precious metals complex.

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Market internals also deteriorated during the session.

Stochastics turned negative across major indexes, momentum indicators rolled over, and several breadth measures weakened.

At the same time, the #VIX closed below 19, providing at least one encouraging sign that fear has not yet returned to extreme levels.

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Given the uncertainty, we continued to focus on capital preservation.

In Grotection, we trimmed #UPRO and #SQQQ and sold #TWLO.

In Turbotection, we had no changes.

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The biggest catalyst ahead is inflation.

With CPI scheduled for Wednesday and PPI on Thursday, investors will soon get fresh data that could determine whether this pullback remains a healthy consolidation within an ongoing bull trend or develops into a deeper correction.

Until then, the focus remains on protecting capital, managing risk, and monitoring whether key support levels continue to hold.

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Watch this Short video where we break it all down in detail 🔽

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You can now find more details about the Market Trend and Grotection Gauge in the FAQ section on the Revere Assets website, along with additional insights into our investment process, portfolio structure, and onboarding.

▶️ https://revereasset.com/faq/

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