2/7/23 The Friday/Monday Warning


Markets slipped lower on Monday, posting the first Down Friday/Down Monday of 2023. We’ll discuss the significance of this in the “Timing” section.

Image from Alamy

The declines were noticeable but not dramatic. 

All four major indexes ended lower…

  • Dow Jones -0.1%
  • Nasdaq -1.0%
  • S&P 500 -0.6%
  • Russell 2000 -1.4%

Sector Round Up

Some winners emerged from the 2-day selloff. 2 of 11 sectors found enough buyers to close higher.

The winners…

  • Utilities (XLU) +0.9%
  • Consumer Staples (XLP) +0.1%

At the bottom…

  • Technology (XLK) -1.2%
  • Communications (XLC) -1.2%
  • Materials (XLB) -1.1%

Notable Names

The emerging AI sector continued to produce massive winners…

Image from MIT
  • C3.ai (AI) +7%
  • Remark Holdings (MARK^) +10%
  • BigBear.ai Holdings (BBAI) +18%
  • SoundHound AI (SOUN) +43%

Not to be outshone, meme stocks surged higher on Monday too.

  • GameStop (GME^) +7%
  • AMC (AMC^) +12%
  • Express (EXPR) +16%
  • Bed Bath & Beyond (BBBY^) +92%

The fact that buyers can support two hot sectors tells us the bulls have a lot of fight left in them.


The most recent index to break out, the Russell 2000, has now formed a “double top.” That’s a bearish pattern.

RUT Daily Candles – Chart via thinkorswim

The breakout level of 1900 is likely to serve as support in the coming days.

We expect a bullish reversal if this level is reached. And it could provide an excellent trade opportunity with low risk and high reward.

This morning…


Friday is a day for squaring positions. Traders tend to reduce exposure to risk since there could be unfavorable development before trading begins again several days later.

On Mondays, the market has had a chance to reflect on recent news and digest the previous week’s price action.

When the market falls on Friday, and again on Monday, it often acts as a warning system. It’s a signal that bears are ready to pounce.

2022 which clearly belonged to the bears, saw 15 “Down Fridays/Down Mondays.”

Right now, it’s a single piece of information.

A trader’s job is to question their thesis constantly. This morning we remain bullish.


*Low Float
^Open Position

*BBAI on watch
*RVSN support at $1.80
*GNS support at $6
*GAME support at $1.75
*ELYS resistance at $1.50
^AEHR resistance at $37
TRVG support at $1.80
CABA support at $12
NSSC support at $31
^VERI support at $9
LPG support at $21
WNC on watch
DSKE support at $8
CDTX support at $1.60
LPSN support at $16
TWOU support at $12
CBAY support at $8
AI support at $22
SOUN support at $4
TGTX on watch
OI support at $20
TMC resistance at $1.50

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