Everyone wants that Capitulation, but hasn't there already been in select areas?
Take a look at sectors / groups for hints
I get it, traders want to see that high volume flush that often means “capitulation” where the last of the bulls thrown in the towel… and that “capitulation” can often mark or confirm the low in the indices after a correction / bear market as a tradeable bottom. Ok, so maybe it hasn’t happened in the SPX / SPY but has it occurred in other areas?
How about China names?
FXI, the Ishares China Large Cap ETF traded a huge amount of volume back in 3/16 which has marked the lows of ‘22 (so far)
was the big volume after a large pull back / downtrend —> yes
What about that ETF that gets all the attention in Growth land?
The ARKK Ark Innovation ETF traded its highest volume on 5/12, which was also the low so far for the year…
was the big volume after a large pull back / downtrend —> yes
Biotech?
The XBI Equally Weighted ETF also saw a series of high volume days in the week of 5/9 which marked a low as well this year…
was the big volume after a large pull back / downtrend —> yes
Remember, the markets (in my opinion) don’t always give us obvious signals and sometime they are a bit more subtle. It could also be this time around that there are tradeable lows occurring at different times, different groups… I also find it interesting that China, Innovation, Biotech were one of the first areas to crack in ‘21 and now appear to have “Capitulated” Only time will tell if the bottom is in for these areas, but there are certainly levels to trade against..
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