Wednesday, July 29, 2015

Second Day of Gains

Another round of buying swept through Large Cap indices, but other indices didn't enjoy the same level of interest.

The S&P had the best of it. Since the middle of July it has enjoyed a strong advance relative to Small Caps and Technology indices, but it may be time for it to revert to mean. Technicals are a little scrappy, but are holding to the bearish side, but one more day of gains could swing it back in bulls favour.

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Tuesday, July 28, 2015

Relief Rally?

Big gains and a strong reversal in the Russell 2000 puts a potential bottom in play.  The Russell 2000 started the day below the 200-day MA, but then rallied to claim a spike low and a close above this key moving average. Small Caps are a key driver in trend cycles. The 'bull trap' from June is still dominant. and a push above 1,280 looks a tall order. but reversing the breakdown of the rising trendline at 1,240 is a different proposition. If it fails at this, then a swift return below the 200-day MA, and then some, opens up. And the long awaited intermediate term decline begins.

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Monday, July 27, 2015

Fifth Day of Selling

Sellers in the S&P made it five days of downside in a row. On this last day it closed near the day's lows, but also on its 200-day MA. If there was reason for a bounce, then tomorrow could be the day.  Technicals are all net negative.

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Sunday, July 26, 2015

Broad Selling

There was no doubt as to the nature of Friday's action. A weak, end-of-week close adds to the negative tone, suggesting the damage is more long term. However, not all indices are in true bearish mode.

The S&P is stuck inside its range, and won't be challenging range lows until 2,045 comes into play. The 200-day MA at 2,063 is an area to look for buyers, although the last test of this key moving average was in early July, which is a little too soon for a new test to hold again. Technicals are mixed, which fits with what is trading range action. Bears may win in the long term, but bulls may get some joy at the 200-day MA for a short term bounce play.

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