In huddling up with traders on Monday, I encountered two schools of thought. The first was that given the magnitude of last Friday's decline, the odds favor morel near-term selling. The second was that the bulls should be able to retest an 8-day or 21-day exponential moving average (EMA).
I continue to believe that unless you're a day trader and scalping throughout the regular session, your best bet is to wait for stabilization or a bullish reversal around the 50-day simple moving average (SMA), the volume-weighted average price (VWAP) anchored to the mid-June swing low and, in the case of the Invesco QQQ Trust (QQQ) , the 2.5-month uptrend line.
As far as day trading is concerned, if you look at a 15-minute chart of QQQ from Monday's regular session you'll see the session was a near-perfect example of a non-trend day. By non-trend, I'm referring to a session where price struggles -- and fails -- to make significant progress beyond the high or low of the first 30 minutes of trading.
Volume was higher than a typical non-trend day. However, the regular session lacked directional conviction, and unless you were scalping it was a great day to do minimal trading.
As we head into Tuesday's session, my primary area of interest for longs is at $300, or the intersection of those moving averages and the uptrend line. If you're a short seller, keep an eye on $310, which represents the VWAP anchored to Monday's open.
While it seems unimaginable for a stock to rally in the current environment, I continue to watch Vision Marine Technologies (VMAR) for a strong close above $7.25-$7.75. The maker of electric motors for boats announced on Monday that it shattered the world record for the world's fastest electric boat while racing in Lake of the Ozarks, Missouri, in front of more than 100,000 people.
Vision Marine worked with Hellkat Powerboats and created a V32, a 32-foot catamaran hull capable of accommodating the necessary battery banks to power two Vision Marine E-Motion electric outboards. The old record was 88.6 MPH, and Vision Marine's boat, piloted by world champion Shaun Torrente, reached a new world record speed of 109 MPH.
While this feat may not translate into an immediate uptick for VMAR stock, it does give the company bragging rights. And for a micro-cap company trying to establish itself as the leader in electrified outboards, bragging rights can translate into orders for new electric motors.
(Please note that due to factors including low market capitalization and/or insufficient public float, we consider VMAR to be a micro-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.)