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Daily Market Commentary: Selling Overshoot

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Buyers offered very little on the day, which was somewhat unexpected given large sell offs in recent months have found it hard to gain traction. What happens during the next rally is of greater importance to bears than the extent of this decline - bears need a lower high to suggest there is something more than just a trade of a couple of days. The S&P traded down at March lows, part of a tight consolidation within a broader February-April trading range. Bulls may sniff an opportunity in this index tomorrow, as the March lows also converge perfectly with the 50-day MA. If there is a doubt it's that stochastics are not oversold, which may make any bounce short lived.

Daily Market Commentary: Big Loss Inside Range

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Large losses on weak jobs data offered bears an opportunity to go on the offensive.  The S&P was least affected by Friday's sell off, but still enough to finish the day with a 'bull trap'. There was also a 'sell' trigger in On-Balance-Volume.

Daily Market Commentary: Sellers Pay a Visit

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The swing trade opportunity sided with the bears, but for Large Caps it wasn't a big swing. The S&P maintained its breakout, and could take another loss and remain above breakout support. Technicals are still net bullish, which makes the short play a weak one.

Daily Market Commentary: Dow Preparing for Breakout

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It's looking good for the Dow following yesterday's breakout in the S&P. There was a uptick in technicals with a 'buy' signal in On-Balance-Volume following a recent 'buy' signal in the MACD. Support comes in around 16,450 with the 20-day MA an alternative support level.

Daily Market Commentary: S&P Breakout

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The week continued its bright start with a resistance break for the S&P. Technicals are improving, with the MACD and On-Balance-Volume on the verge of a new 'buy' trigger.  However, there was also a snap-back relative swing against Large Caps and back to Small Caps despite the breakout. Bulls will be gearing up for a measured move; the first target is 1,920.

Daily Market Commentary: Second Time Lucky

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Buyers had laid out the ground rules for Monday's gain on Friday, and they grabbed their opportunity with both hands.  Small Caps had the best of the action (as it had suffered the most at the hands of sellers), pushing itself back above its 50-day MA.   Intermediate slow stochastics [39,1] managed to honor mid-line support as short term stochastics [14,3] generated bullish crossover - a decent 'buy' signal with a stop on a loss of 1,146; a set up similar to November's swing low last year. Take partial profits on a test of the 20-day MA.

Daily Market Commentary: Failed Bounce

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Interesting action in the markets. Five days of sharp selling in the Russell 2000 should have set up for a relief bounce, but bears were quick to sell the morning bounce bringing markets back to their open price by the close of business. Monday offers another opportunity for buyers, and while they didn't enjoy success on Friday, they may do better on a second attempt. Thursday's swing low of 1,146 looks a good place for stops.  Watch for sellers again at the 50-day MA.

Daily Market Commentary: Small Caps Rout

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A day of hidden losses. The S&P rejected a fresh test of resistance, but didn't take significant losses by the close. Volume climbed to register distribution, but it was well below Friday's whopper volume. However, Small Caps took a big hit, dropping nearly 2% as buyers stayed away.  Losses were quick to undercut the 50-day MA and the March swing low. Next up is the February swing low and/or 200-day MA. Relief bounces are likely to be shorted at the 20-day MA.

Daily Market Commentary: Stalled Rally

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Buyers concentrated their attentions on the S&P, but the attempted rally stalled as it approached yesterday's high (which is below larger resistance).  Bulls may yet attempt another rally tomorrow, although after today's close the S&P is scored even between bulls and bears.  The MACD and On-Balance-Volume are near term bearish, but stochastics remain firmly in the bulls camp.

Daily Market Commentary: Day 2 to Sellers

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Bears were able to push markets into a second day of selling, but the last time they were able to chalk a third day of selling in a row was December. In bears favour is the lack of support; for example, the next support level for the S&P is the 50-day MA.

Weekly Market Commentary: Rejection of S&P Highs

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Friday was set up for bulls, but in the end they couldn't maintain the push. The S&P experienced the largest swing as it posted at a new high from the open, but rejected an attempted a follow through near midday. From there on it was down all the way. Volume climbed to register as significant distribution, although the bulk of the volume came on morning buying (which is now trapped from the latter selling).  This kind of reversal can get ugly quick. Not a time to buy, an aggressive short with a stop above 1,884.

Daily Market Commentary: Modest Bullish Action

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The back-and-forth between bulls and bears continued, this time with bulls controlling the day. Action tightened as the spread between the day's high/low narrowed, although the S&P still managed to experience a relatively wide trade day. Action in the Nasdaq is narrowing to a coil. It could spring either side: a short break should bring a test of 4,245; an upside break will bring 4,371 into play. Either way, a stop can be placed on a flip-side and play it from there.

Daily Market Commentary: Selling Distribution

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Wide range days made appearances across the board. Volume climbed to register distribution, but the day was not significantly bearish to suggest either bulls or bears have control. Tomorrow could result in an inside day as it would be hard to see three wide days follow with a fourth within a broader area of congestion. The S&P finished at its 20-day MA without managing a challenge on resistance.

Daily Market Commentary: Low Volume Gains

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While it didn't bank the biggest percentage gain, the Nasdaq was able to register a day of higher accumulation, although volume was light in general.  The gain in the Nasdaq didn't change the technical picture a great deal, but it did manage a close above its 20-day MA.

Daily Market Commentary: Gap Rally Fades at Close

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Bulls made a stab at forming a swing low with a gap open, but were unable to push on with further gains. Sellers returned in the afternoon, but the gap remained in play by the close of play. The Nasdaq remains the index best positioned to build on bullish momentum given it still holds breakout support. I have redrawn the line in the sand for this index at 4,245; a failure of which would see this morph into a broader trading range with support down at the December and February swing lows.

Daily Market Commentary: S&P Breakout Lost & Happy Paddy's Day

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The S&P breakout (from the January highs) was negated on Friday's close, effectively converting the February-March rally into the boundary for a horizontal trading range. There was a 'sell' trigger in On-Balance-Volume to follow the earlier one for the MACD.

Daily Market Commentary: Bears carry a sting in their tail

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Old news was tied to today's losses, but this is a rich market which if offering more to holders who have held shares over the last 5 years to sell, than those willing to buy.More importantly, it was the first real day of intent from sellers, as up to now, bearish action had been weak. Volume registered as confirmed distribution. Hardest hit was the more speculative Russell 2000. The sizable bearish engulfing pattern effectively wiped out the breakout, leaving a bull trap. The index did finish on its 20-day MA, but I wouldn't get too comfortable with that. There was a 'sell' trigger in the MACD to add to the misery. Even with this, the index is still outperforming the Nasdaq.  Shorting opportunities will become available on rallies back to the engulfing high.

Daily Market Commentary: Bulls Take The Advantage

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Better stuff from bulls as traders mounted defenses of support. The semiconductor had the best of the action, its large bullish engulfing pattern off the 20-day MA keeps with the story of an accelerating trend. It's not totally out of the woods: the MACD trigger and CCI 'sell' suggest this rapid advance will consolidate soon, although bulls are likely to maintain the long term advantage.

Daily Market Commentary: Selling Intensifies

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After a series of relatively tight trading days, today opened up with a clear swing to sellers. Volume climbed to register distribution, but markets are really feeling for support following recent breakouts. Weakest was the Russell 2000.  It registered over an 1% loss as the measured pullback gave way to more active selling. Tomorrow will see how valued 1,180-1,182 support is for the index.  The CCI experienced an advance 'sell' signal.

Daily Market Commentary: Low Prices Rejected

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The second half of last week saw challenges of recent highs rejected (for the Russell 2000 in particular), but today it was the turn for bulls to repel the action of sellers. The S&P returned to its open price, although trading volume was light. Today's low is a place for stops, although buyers will want to see morning action hold above 1,877 to build confidence.

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