Sentiment plays a big role in anticipation of the next move in the market. As such, the markets have shown an elevated amount of bearish sentiment this week. We will look for a bounce on Thursday and a follow-through into Friday.
Nasdaq Market and Sentiment
Nasdaq sentiment has been particularly bearish.
That makes sense as growth stocks and big tech were trading at highs. We felt a pullback was in the cards, as growth stocks failed to continue higher. This was one of the reasons we have been taking profits off the table the previous two weeks. We also reduced our risk by trading fewer positions.
Futures are higher. Look for markets to mean revert a bit over the next few days.