Tuesday, September 29, 2020

Bounce stalls despite morning gaps

Friday's rally offered a promising open with a gap higher, but there was no follow through on these gains. 

In the case of the Nasdaq, there was a close above the 50-day which also picked up the 20-day MA but if the gap is to register as a true 'breakout gap' it cannot close. There was  a 'buy' trigger in OBV to go with today's gain. The index is still outperforming Small Caps as it looks to build on its leadership role as the primary home for funds. 

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Sunday, September 27, 2020

S&P Bounces At Measured Move Target

An easy headline which has played out as true, although the same bounce occurred in the Nasdaq well before the measured move target is reached. In the case of the S&P, the measured move target is above the 200-day MA - a typical support level and a more likely area for a bounce - so it remains to be seen if this bounce will hold but it does provide a level to set protective stops (for existing positions in the S&P and member stocks). Note, technicals are all net negative and aren't really in support of a bounce, with the exception of short term and intermediate stochastics which have converged at an oversold state. 

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Thursday, September 24, 2020

Selling Accelerates; Measured Move Targets Still In Play

Sellers again stamped their authority on markets with significant pushes lower which completely erased the weak buying of Tuesday. Markets remain on course to reach their measured move targets.  The index closest to doing so is the S&P. 

No surprise to see technicals for the S&P net negative although the index continues to outperform speculative Small Cap stocks. Volume climbed to register distribution, an additional confirmation for today's selling. Once the measured move target is reached - likely tomorrow - next up will be the 200-day MA.

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Monday, September 21, 2020

Selling Continues Across Indices

Indices continued to decline with measured move targets for the S&P and Nasdaq still in play. However, the real damage was done in the Russell 2000. The index made a clean break below its 50-day MA on a gap down with new 'sell' triggers in Stochastics, ADX and relative performance. Volume climbed to register as distribution.  The index which had been defending the breakout is now having to contend with a new level of overhead supply.

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