MasterCard: An example of a Bear Trap

Mastercard broke a bearish upward sloping wedge yesterday.

After losing the trend line around 158-159, it sold off all the way down to 149 at open today.

However after the first few minutes, it ramped up to never look back hitting a price of $163 before taking a pause.

Mastercard closed strong at 164.37 close to the high of

the day.

It formed what is called a bullish engulfing candle, a very strong reversal pattern.

Intra-day there was very strong support at 160.50.

Yesterday I had talked about how though the SPX had broken the wedge, it was still in an upward channel. Today the SPX recovered most of its losses from yesterday.

Mastercard’ s price-action today wa

s a microcosm of the broader market.

This is a treacherous market with big unexpected moves.

It is not a market where one should lean stronger on either side.

No home runs; certainly no grand slams.

Collect your runs single by single.

PS: As I write this, Capital One (COF) reported rising defaults. It is likely that credit card related equities will be under pressure; but nothing is certain.

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