Scott Redler’s Dog Bytes: Watch These ETF’s Closely

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Welcome to Scott Redler's Dog Bytes, which gives you a selection of insights from Scott's Redler Report newsletter.

We have mostly red arrows around the world on worries over pandemics and central banks. Europe and Asia are both broadly lower to start the week.

A double Red Dog Reversal into the SPX 4386 area while internals weakened and small caps headed lower is why I preached reducing risk. I went from 25+ equity longs a few weeks back to around 10 early last week to net short by Tuesday. That helped me navigate the tape and minimize the pain.

SPY's gave us ways to make money short last week as it played downside catch-up. Friday, it opened above $435 and failed with a close below Thursday's low to keep some short coming into today. $427 is pivot support to keep in mind but $425ish is a more important area.

QQQ/Tech was the last sector to get faulty. The question is does it play downside catch-up? Or does it find a low today to lead the market off the lows? Watch the 21 day around $354, and see if it reclaims Friday's $357.24 low. I'd also watch key names like AAPLAMZNMSFTNVDATSLA for clues on the action.

IWM broke the $224 area as the wedge resolved lower. On Friday, it hit a low of $214.47. I’d cover some and see if there's a tactical buy vs. a 5-15-30 minute low. $211 is some support and then $207.50ish is the major. If this channel breaks and stays below, it can tell us this correction will last.

Bank earnings were sold last week. Now we’ll see if XLF can reclaim $36.10 or not. $35.51 is support. A break and close below could mean more trouble ahead.

Positions Disclosure as of 7/19/2021 at 8:02 a.m. ET