Rally Attempt Failure – Back to the Drawing Board
Richard Moglen
Stock Trader & Student of the Markets. I help traders improve their systems & performance at TraderLion & Deepvue
March 3, 2025
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Market Action
QQQ – Gap up and negative close with an undercut of Friday’s Bar. This means we are once again looking for the start of a new rally. We rallied into the declining 10ema area at the open before rolling over.
This is a very weak tape, be prepared for anything, including acceleration to the downside. A big negative that we were not able to follow through up after Friday’s action.
What will be my playbook when we start to rally again? Read my educational Article on Trading Market Rallies from this weekend.
It seems the dominant fundamental factor currently is GDP growth. Catalysts around that topic will move the market.
The short term expectation based on today’s close and recent action is follow through to the downside. The 200sma lies just below
Bulls want to see us either gap up and hold tomorrow or what would be more positive is severe weakness that is bought up and closes strong, either with an oops reversal on a gap down or upside reversal after undercutting a key level.
Bears want to see us follow through lower.
IWM – Negative outside day, below all the moving averages
IBIT- Gap up after the positive news about the reserve but sold off hard. Expectation is more follow through down
Trends (1/4 Up) – Based on the QQQ
Shortest – 10 Day EMA – Below declining
Short-term – 21 ema – Below declining
Intermediate term – 50 sma – Below declining
Longterm – 200 sma – Up – Above Rising
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Groups/Sectors
Performance Today from open on the Left, Performance over the past 20 days on the right.
Not much change here the same defensive themes are leading
Performance Charts from Deepvue
Deepvue Leaders Heatmap
S&P 500
Heatmap from Deepvue
Group Ranks: 1 Day, 1 Week, 1 Month, 3 Month from left to right. This is now a preset for Deepvue Members
Post Market Action. OKTA GTLB set to gap up
Leaders and Key Moves
Important Note: Many of these “leaders” are now leading to the downside. Still they provide a good gauge of market environment. As new leaders reveal themselves I will curate this list.
NVDA Today was as negative as Friday was strong. Poor closing range and continuation down. Below all the MAs. Rallies up are suspect. I still believe the larger pattern is now Stage 3 in danger of transitioning to Stage 4
TSLA still in a downtrend, a positive that it is holding the 200sma and the gap low, that is a key level.
META another downside reversal at the declining 21ema
RDDT tried to push higher but rejected at the declining 10ema. Watching for it to hold the recent range
PLTR no follow through on the oops reversal, downside reversal today
CRWD downside reversal off the declining 21ema
BROS still consider this showing RS despite today’s downside reversal, holding above the 21ema
U broke lower
GRRR downside reversal but above the MAs, more speculative name
ROOT downside reversal at the previous high, negative close.
Stocks Setting Up / Showing RS
5 Day Slope % Change in Deepvue has been my new favorite way of spotting stocks showing Relative Strength. As mentioned before 1 day of positive action is not enough, we want to look for persistent relative strength and stocks that are forming sound bases in new leading themes. There is not much of that second part yet so we are casting a wide net
ERJ noted a few days ago, short term extended. HEI same theme also acting well
TGTX very strong action after earnings. Biotechs continue to lead
NTNX acting well in comparison to the market. Fade off highs
LNTH still holding this flag under the 200sma
ERIE, insurance and strong action, notice the gap down HVC in the base transitioned to a support level
GSHD insurance, acting well except for today’s downside reversal
LINE this REIT could be transitioning to an uptrend. Average volume increasing subtly
XPEV pulling back but holding above the 10ema
AHR re-breakout, this REIT recent IPO can trend
AS downside reversal but still like the shape as long as it holds near the MAs
AMT above the 200sma
GILD still trending
LLY still acting great
URBN fade at the pivot
RKT still acting well, the 200sma and previous gap level will be a key test
Themes and Leaders
Strongest Themes: Biotech Miners Insurance China Aerospace/Defense.
These are not the types of themes I like to trade or ones that typically act well for an extended period.
Market Thoughts & Focus
Friday’s low was the key and we undercut it today after a significant gap up. Now we are once again waiting for day 1 of a rally attempt. Patience is the name of the game unless you are an aggressive trader who likes to shorten up timeframes and trade the intraday swings.
It may take time for new leaders and themes to shape up. In the meantime I would recommend focusing on improving your system. Build a model book, update your rules, learn a new setup… read the previous Trade Lab Case studies.
Anything can happen, Day by Day – Managing risk along the way