Popular posts from this blog

Upcoming "Death Cross" for Russell 2000 ($IWM)

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There was some modest buying today from the open, but volume was light and markets are below trading range support established during the latter part of 2024. It's hard to see where the buyers are going to come from given the chaos of Trump. I should add, I listened to Josh Brown's The Compound podcast and he showed an interesting chart of market returns in April-May in the year following a strong return in markets; in essence, selling to pay capital gains tax. Given the precarious nature of markets, and the possibility for this seasonal factor to play out, it's likely we have a couple more months of downward action before value buyers return. If we look at individual markets, the Russell 2000 ($IWM) is looking like the first to signal a long term shift in favor of bears with an upcoming "Death Cross" between the 50-day MA and 200-day MA - perhaps completing before the end of the week. Technicals are net bearish and the volume trend has collapsed since the st...
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Weekly review of Stockchart.com charts

Friday was a rough day for the markets and left the mini-rally in tatters. What had Stockcharters to say about it?

Richard Lehman of the Channelist.com kicks off with channel breaks:

7/18 -- Short term blue minis all broke Friday and long term declining purples held. The long term trend wins, and right now the direction is quite clear. The new red minis that began Friday cannot all be drawn yet, but the breaks and the direction are indisputable.

The ultimate downside target on the long term purple channels could be 8-10% down from here, but lets see how it plays out before we bet the farm on short positions. Earnings reports are still liklely to cause volatility in the next few weeks.

7/15 -- A number of short term minichannels have now changed slope but are still trying to climb, so I've drawn them as larger green channels now. Volatility dropped sharply when the breaks did not follow through to the downside. The dollar keeps dropping, but Toronto stocks sure had a nice day. Things are getting a little jumbled ahead of tomorrow's option expiration. The long term charts are still pushing up against the purples but encountering resistance.

7/14 -- Momentum is waning, though none of the short term minichannels have broken. The Dow and SPX actually touched their lower blue mini lines, and held so far. It looks as if the long term declining purple trendlines are having an impact here, and at the least, we may see slope changes to someting flatter if not breaks soon.

Yong Pan of Cobrasmarketview is keeping to a nearly neutral market stasis.


Validation for a top?


Bear trendline resistance too


Ten-year yield break and backtest (lower yields ahead....)


Michael Eckert of EWTrendsandcharts has the bearish wave count playing to form with the trendline backtest and the potential downward target of 878 for the S&P (closed Friday at 1,065)


The 60-min chart showing a clearly defined downtrend


Slightly different take on the Elliot-Wave count by Anthony Allyn of Tonyspublicchartsblog.


Joe Reed summarises how bad Friday was


While not marked on this chart last week was a clear bear flag for the Gold and Silver Index (note bull trap on WM %R too)


Finally, Robert New shows the rejection of resistance in the Nasdaq too:


Ducks all aligned for a nasty week this week? Last week highs also mark declining resistance from April - so if they break it will be a significant victory for bulls.

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Popular posts from this blog

Upcoming "Death Cross" for Russell 2000 ($IWM)

Image
There was some modest buying today from the open, but volume was light and markets are below trading range support established during the latter part of 2024. It's hard to see where the buyers are going to come from given the chaos of Trump. I should add, I listened to Josh Brown's The Compound podcast and he showed an interesting chart of market returns in April-May in the year following a strong return in markets; in essence, selling to pay capital gains tax. Given the precarious nature of markets, and the possibility for this seasonal factor to play out, it's likely we have a couple more months of downward action before value buyers return. If we look at individual markets, the Russell 2000 ($IWM) is looking like the first to signal a long term shift in favor of bears with an upcoming "Death Cross" between the 50-day MA and 200-day MA - perhaps completing before the end of the week. Technicals are net bearish and the volume trend has collapsed since the st...
Read more

"Dead Cat" Bounce or Something Better?

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It's still a little too early to say, but the bounce is in play and "long" is the place to be. There is a huge amount of overhead resistance and the risk:reward remains tight with moves back to Thursday's lows well within expectations. For the S&P, I would be looking for a rally back to test the 200-day MA, or a fast-falling 20-day MA, whichever is the lowest. Real supply won't kick in until 5,700 is tested, and maybe it will have the juice to get to 5,775 before volume selling makes its presence felt. As the index makes this move I expect to see a decent On-Balance-Volume 'buy' signal, alongside what will be a weak MACD 'buy'; other technicals are likely to remain bearish.
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Sell The News. Nvidia Can't Save Market - Worse To Come?

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The pre-market optimism didn't last long, but when markets are coming off an extended high it's hard for buyers to return there, even off the back of 'good news'. The Russell 2000 ($IWM) opened bang on resistance at $237, and then it was all down from there. Volume surged in confirmed distribution, leaving the 200-day MA as the next logical support level.
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