Fallondpicks.com: Weekend commentary

Newsletter, Members Click HereVery little to add to Thursday's post. Markets are overbought - but could stay this way as they bump along ever higher. The good news for bulls is the various trend channels in play across all the key indices listed on my public stockchart list. The biggest shift was in the most current (most bullish) alignment of the markets with small caps [Russell 2000] now leading Tech [NASDAQ] - {Small cap > Tech Indices > Large cap}.

The chief change elsewhere was the new MACD 'buy' trigger in the semiconductor index, combined with a resistance break of the bearish divergence in its CCI. The index trades inside its former rising channel and is well positioned to climb higher. There should be enough momentum to see the upper part of the channel at around 510; only the 200-day MA at 477 could spoil the party.

Tech market internals [$NASI, $NAA50 and $BPCOMPQ] increased their rate of ascent, but having cleared cyclical bear market reversal zones they now have plenty of room before encountering resistance levels associated with bull markets. Volatility could be the early warning system for a decline - the small bullish harami cross sets up a fear spike for Monday/Tuesday - whether that builds into something more fearful will remain to be seen.


Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more