Bears swilling in the muck

An incredible (further) sell off on Wednesday has been followed with a modest pullback on this shorterned trading day. The biggest story of the week are the internals - something you will have no doubt seen mentioned on other blogs. Here is my take.

The Nasdaq Bullish Percent Index is only a couple of points away from entering bear market oversold territory, but is at a bottom for a bull market:


The percentage of Nasdaq stocks above the 50-day MAs is also lingering close to bear market territory, and like the bullish percents, is at a level which generated the August bounce. Note the developing bullish divergence in Ultimate Oscillator, a good sign for a bottom here.


The Nasdaq Summation Index is perhaps the only internal which still has some downside room to indicate a strong bottom, but an uptick here would not preclude a decent rally:


Today's action will be interesting for those few traders who decide to take a dip in the pool, as things look nicely set for a big gap up on Monday. Enjoy the long weekend and Turkey leftovers.

P.S. Because of another weekend without Broadband there will be no Stockcharts Weekly Review.


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