Measured Moves Down In Play for S&P and Nasdaq

Friday's selling sees a break in the 50-day MA for the S&P, following the lead of the Nasdaq from last week. Selling volume climbed in confirmed distribution across the indices. The measured move targets for both these indices remain in play with each swing low likely to breached Monday. Not surprisingly, technicals for the S&P and Nasdaq are both net bearish.


The Russell 2000 finished the week at its 50-day MA support on a neutral doji. It's the only index not to challenge its swing low although it did register confirmed distribution on Friday. Techncials are a mix with bullish signals for Stochastics and ADX offset by the bearish 'sell' triggers for On-Balance-Volume and MACD. However, relative performance has been good and the index has managed to return above breakout support, even if the set of candlestick in recent days have looked more bearish. 


The Dow Jones Industrial average hasn't suffered the same fate as the S&P as it remained above its 50-day MA and breakout support in a rare divergence to the S&P.  It didn't escape the bearish distribution though but has the potential to attract buyers in an ever decreasing pool of opportunities. 


Semiconductors confirm bearish action in the Nasdaq with a 'bear flag' to go with a reversal of stochastics at the mid-line, along with bearish technicals for ADX, MACD and CCI. Despite this, the index is outperforming the Nasdaq 100 and is the index to watch if there is potential for a recovery. 


Friday's action gave the strongest indicator that more selling is on the way with traders given the weekend to stew on developing weakness. There was an attempt by bulls to shore up the defenses on Thursday but it only took a day for this work to be undone; it's unlikely the prior swing low is going to hold and my earlier assumption for a measured move lower is looking ever more likely. 

You've now read my opinion, next read Douglas' blog.

Share on StockTwits

---

Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.

Follow Me on Twitter


Investments are held in a pension fund on a buy-and-hold strategy.



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