“Don’t hang around ‘cause two’s a crowd on my cloud baby” Get Off My Cloud, The Rolling Stones
Momentum stocks started out strong on Monday but faded mid-morning.
The QQQ left a Soup Nazi sell signal.
This is a new 20 day high with a reversal back below that high with at least 4 days interval.
The 4 day interval is to guard against a continuation move versus a test.
In other words, “no soup” for those chasing the new high.
Because the Q’s “souped”, we will show the analogue to historic highs in tomorrow’s report.
Downside follow thru threatens to snap a rising trend line for August.
From Monday’s 576.80 high 90 degrees down is is 553.
Square of 9 Wheel
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In sum, the Q’s advanced roughly 90 degrees from the August 1st low of 551/552.
That is an important level because it ties to the July 16th low.
So we have a stealth double bottom at 552 region.
A drop to 552 ties to a test of the 50 DMA which has been moving up.
The 50 DMA hasn’t been tested since being reclaimed on May 1st, so a test is due.
The question will be how will a test of the 50 DMA be handled by a market with a litany 100 year flood of divergences we’ve been highlighting in this space this month.
It is an interesting time for the market to have struck this test failure of the July 31st Key Reversal Day.
Today is the 43rd anniversary of the August 12 major low that launched the mother of Bull Markets.
43 is straight across and opposite August 8, the mid-point of the reversals the market has carved out in the last 2 weeks.
Late August of course marks the top of blow-offs from May lows in both 1929 and 1987..
It is on May 12, 2025 when the market gapped up and went into overdrive, that the market shape-shifted from a rebound to a runaway.
So this year also dials in a 90 day/degree melt-up…May to August;
PLTR exemplifies reversal in momentum Monday. With a Jump the Creek sell signal.
NBIS is another leader that left a 10 day Topping Tail, a Lizard sell signal
STRL followed thru from a Hidden Dragon (double up inside) sell setup from Thursday August 7.
WDAY, a Hit and Run an audible short on the Hit and Run Private Twitter Feed on Monday, typifies the SaaS/cloud sector that is getting pummeled.
Other tech names plunging are TEAM, CRM, OKTA, TWLO and IBM to mention a few.
A few stocks held up nicely,
TSLA extended after a Rule of 4 Breakout
META is coiled to come out of a Bull Flag
CRWV is poised to attack 145 which is 360 degrees up on the Square of 9 Wheel ahead of earnings
Other notable momentum names that gave up the ghost on Monday are CRDO with a Lizard sell signal and AMD which faded after turning its 3 Day Chart up…a bearish pattern.
Because of the failure of the QQQ and SPX failure to follow thru (for the moment) from Friday’s record highs we wanted to flag the QQQ Soup Nazi sell and will walk through the stunning analogue of historic tops in tomorrow’s report.