The market just showed how fast a good headline can turn.
$Meta Platforms, Inc.(META)$ printed revenue growth strong enough to send the stock higher after hours, and yesterday for few hours it looked like a solid move, actually there was not a bearish print in the indices, they just didn’t show conviction at the close yesterday. The reaction faded based on META’s spending plan, with CapEx running at a pace that changes the free cash flow math.
$Tesla Motors(TSLA)$ had a bearish reversal for the opposite reason, it cut its CapEx guide and the market read that as a delay in the AI buildout. I wrote yesterday that earnings reactions often print fake moves at first (mostly for TSLA and META), these two followed the script.
The selloff that came next went further than expected for the short term, but the only way to capture it was using the futures, when the $E-mini S&P 500 - main 2612(ESmain)$ lost our central weekly level of 7,754 at 9PM EST, and it spread across the tape.
The Weekly Compass had it on the map, what seemed an invalidation of the bearish case anticipated last Saturday ended confirmed in a single session, both the $S&P 500(.SPX)$ and $NASDAQ 100(NDX)$ lost their key levels and the bearish continuation is what played out. Weekly setups can trigger at any moment, which is why that timeframe is at the center of how I read the market, and the $Cboe Volatility Index(VIX)$ breakout we've been studying with subscribers is the condition to keep in mind.
Markets are always moving - and sometimes, the best move is knowing what works for you.
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