The Market Sells Off. More Weakness to Come?
Richard Moglen
Stock Trader & Student of the Markets. I help traders improve their systems & performance at TraderLion & Deepvue
February 21, 2025
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Market Action
QQQ – As I’ve noted over the past few days, despite being near all time highs the leaders were showing distribution and today the QQQ caught up, dropping over 2% and closing below the 21ema.
This is a very sharp selloff, the type of action that could indicate further weakness.
Short Term Expectation based on the close is consolidation or lower
Bulls want to see us quickly rally with a positive expectation breaker
Bears want to see us follow through lower breaking the 50sma
IWM – Even weaker action, falling below the 200sma
IBIT- Looks to have put in a lower high today and breaking back below the MAs
Bulls want to see us quickly recover
Bears want to see us follow through lower and test base lows
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 – Below declining
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Groups/Sectors
Performance Today from open on the Left, Performance over the past 20 days on the right.
Performance Charts from Deepvue
Deepvue Leaders Heatmap – Most down from the open
S&P 500. Continued rotation into staples, utilities
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. Not much of note
Leaders and Key Moves
NVDA Sharp drop below the recent range, testing the 21ema
TSLA some follow through lower after testing the declining moving averages
META closing below the 21ema
RDDT more follow through lower, next key level is the previous base lows
PLTR some downside reversal action
CRWD close below the 21ema
BROS break lower from the range, earnings ranges are not following through currently
TEM lost the base pivot, testing the 21ema
HIMS sharp drop
DKNG break lower
U green but downside reversal off highs
CELH gap up, mixed action
Stocks Setting Up / Showing RS
EXEL gap up. Biotech has been showing strength
AXSM nice pop from the tight area
CWAN holding the earnings gap
TME china related names continue to act well
MP good action post earnings
U will be watching to see how this holds up
SEI very small company, but in a strong trend
ZIM this is the right side of an 8 month base.
MELI gap up, mixed action
INOD fade off highs but overall strong recent action for now, one to keep an eye on
CRK oil and gas name that’s acting well
TTWO holding above the 10ema
Themes and Leaders
Key Themes: Software, Cyber, AI, Semis, Biotech
Strongest names in software – PLTR SNOW SHOP GTLB ESTC NET CRWD ASAN PLTR TWLO APP
These names have the top RS, growth stories
RDDT CRWD HOOD DKNG
Recent Gaps and Earnings Moves
Day 2: U RIVN GRAL INOD CELH MELI
Day 3 and Later: APP BROS HOOD MNDY PINS DOCS AFRM NET TWLO UPST CFLT ABNB ROKU PCOR DKNG
Market Thoughts & Focus
A key day that could signal more weakness. Heard news about a potential new covid which could be the cause. Casting a wide net and beginning to look for RS. I want to emphasize that during weakness we are looking for persistent RS, not just one green day. To identify leaders early we want to look for stocks that consistently act better than the rest during a pullback/correction.
Early Next week will be key. Will we get an immediate recovery or is this the start or a sharp selloff.
Anything can happen, Day by Day – Managing risk along the way