The Bloodbath is Here... What Comes Next?
Posted February 26, 2021
Graham Summers
The bloodbath I’ve been talking about for the last few days finally hit yesterday. The S&P 500 dropped almost 2.5%, while the NASDAQ fell over 3.5%.
The big question now is whether the selling is over… or if things are just starting to get warmed up.
Unfortunately, it is likely that things are just starting to get warmed up.
As I noted earlier this week, Tesla (TSLA) is one of the key market leaders for the rally. Not only is it EXTREMELY popular with Wall Street, but it is also EXTREMELY popular with individual/retail investors.
As such TSLA shares are a GREAT leading indicator for the broader market…
TSLA has taken out its 50-day moving average and stayed there. This opens the door to the 200-DMA, which is down near $500 per share.
This opens the door for a similar move for the stock market as a whole.
The NASDAQ doesn’t have much support until you get to just under 12,000.
For the S&P 500 it’s just over 3,500.
Whether we grind our way lower to that point or enter a free-fall, remains to be seen. But the odds GREATLY favor the next 10% move for stocks being DOWN instead of up.
This doesn’t mean that this has to be a period of great pain for you.
Those who are properly prepared will make literal fortunes.
Best Regards,
Graham Summers
Editor, Money & Crisis