One of the features that I believe I need to start being more conscious of, is that the market is increasingly a “market of stocks”, rather than a “stock market”. What I mean by that is historically most stocks were generally directionally correlated to the direction of broad market averages. Now even the averages are not correlated to each other! The Dow, the Nasdaq and the Russell all have starkly different pathways. So with that in mind it serves to pay less attention to the broad indices and more attention to individual stocks.
The stock that I have on watch right now is Shopify. In the attached chart notice the big gap up on earnings. Since then it has trapped buyers as noted in the purple boxes. I would like to see the RSI make a new low here, lower than the RSI readings of the past year. If RSI does make a new low price will have to drop at least to the top of the earnings gap and may fill some of it. Trapped longs may to some extent be stopped out, and we will have a very oversold stock, still in an uptrend, coming off an earnings beat. This is a great “buy the dip” situation. So we will be watching for a bit more weakness here to go long Shopify / options.