Classic Retrace in Progress

The markets are fading off the highs of the day as lingering global fears persist. In addition, this is a classic retrace back higher after the major drop last week. A retrace states that after a significant two or more day move, the market or stock making the move will jump in the opposite direction but stay inside the original move. After the retrace completes, the market or stock heads back in the original direction.

After putting in a major pivot top last week, the markets fell for two or more consecutive days. After a bounce on Friday and initially today, the markets have started to slowly fall again. Is this a classic retrace over the last two trading days? Is the market going to start to move lower again? It is possible.

There are some major stocks showing weakness today. Amazon.com, Inc. (NASDAQ:AMZN) is dropping sharply, trading at $172.31, -4.93 (-2.78%). In addition, the financial sector has turned to the negative side, leading the markets off their highs. Goldman Sachs Group, Inc. (NYSE:GS) is trading at $164.27, -0.50 (-0.30%) while JPMorgan Chase & Co. (NYSE:JPM) is trading at $46.52, -0.16 (-0.34%).

The next few days will be pivotal in terms of seeing if this retrace back up is just a setup for another move lower. Continue to watch the 52 week highs on the S&P 500.

About Gareth Soloway 168 Articles

Affiliation: InTheMoneyStocks.com

Gareth Soloway has been an avid swing and day trader since his days at Binghamton University where he studied Economics. After college, Gareth quickly excelled as a financial advisor, helping clients get their financial houses in order. While helping others gain financial independence, he continued to study the day trading and swing trading world, developing a unique market philosophy and proprietary methods. Following his work in the financial sector, Gareth went on to trade alongside professional traders. Unable to tolerate the hype of Wall Street any longer and having an amazing ability to profit using his developed techniques, Gareth Soloway decided to partner with his friend and colleague, Nicholas Santiago to form InTheMoneyStocks.com. Chief Market Strategist Gareth Soloway serves as the president and CFO of InTheMoneyStocks.Com.

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