Fallondpicks.com: Weekend commentary

The gap between the Dow/S&P and the NASDAQ/NASDAQ 100 grew, while the Russell 2000 maintained its leadership role with new closing highs. Given the % gains and new multi-year highs it was a relatively light volume day for both large cap indices [Dow/S&P]. But best news for the bulls was the break of the MACD bearish divergence in each of the large cap indices. There is still some chance of new bearish divergences developing but there should be sufficient upward momentum to prevent this from happening. The Tech averages NASDAQ/NASDAQ 100 were kinda of forgotten amongst the melee and both trade below April/January highs respectively. Volume fell in both of these indices as money rotated into the relative safety of large cap stocks. Speculators continued to fuel the small cap rally [Russell 2000] and trend traders will have been pleased with Friday's gains. The MACD "buy" trigger was additional confirmation, but unlike large cap indices it has yet to challenge it's newly forming MACD bearish divergence. Markets still hold to an end-phase rally and putting excessive amounts of capital to work in this environment remains a high risk proposition. Secondary Tech averages [$NASI, $NAA50 and $BPCOMPQ] were little changed from Thursday; the $BPCOMPQ stuck to its bearish cross of the 5-day EMA and break of 4-month trendline support, as the $NASI continued to make its picture perfect bounce off support. The net effect of the $NASI, $NAA50 and $BPCOMPQ indicators is bullish and long positions remain favored over the next 4-6 weeks, but this should be toe dipping buying, not wheelbarrow loads of stock.

Newsletter update:

PTIE was a Subscriber pick for April 10th. The stock failed a breakout, reversing through its stop after it posted earnings. The play closed for an 8% loss.

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