Showing posts from September, 2016

Intermittent Updates until October 1st

Back in NY for a couple of weeks, so updates will be fewer until I return.

Distribution Volume Holds Near Thursday's Highs

Friday saw some big volume, although there was a relatively tight price action to close near the highs of Thursday. Best of the action looked to belong to the Nasdaq as it knocks on the door of 5,287. A gap higher on Monday opens up for a push to new all-time highs. Watch if it coincides with a MACD trigger 'buy', this will strengthen the validity for the move higher and encourage technical buying.

Tech Indices Get Their Boost

Bulls got their reward with the Nasdaq popping higher following a series of inside days. The coiling action brought about by recent action delivered over a 1% gain. Volume climbed to register an accumulation day. In addition, the post-jobs report breakdown gap was closed, turning the decline into a brief consolidation. A challenge on 5,288 is next.

Tech Rallies Stall, Large Caps at Low

The day started with bulls enjoying a positive start, but much of these gains were clawed back by the close. The Nasdaq had the best of the action, doing enough to finish above yesterday's close - but not enough to finish at the day's highs. Instead, Tech averages left an 'inverse hammer' in what is looking like committed bearish action.

Bears Take Another Slug

After yesterday's blast, bears took another chunk out of the recovery. Bulls might actually get more joy with a small position at the lows of the last three days in Large Caps. Pre-market action will be key; should it look like the market will open below the 3-day low then there could be a runaway lower. In such case, waiting for things to settle after the first 30 minutes of opening trading may offer a better entry.

Two Bar Reversal

After weeks (and weeks) of inactivity, markets have delivered two big days of activity: Friday's sell off and today's recovery. Which of these days delivers the basis for market action over the next few months remains to be seen. One could argue today's lighter volume and inability to recover all of Friday's losses gives bears the edge, but the longer term trend is all bullish. I am biased by holding a Dow Jones short, but intermediate term technicals have turned bearish for both S&P and Dow. The rally in the S&P stalled out at the 50-day MA. The index has underperformed since July and Friday's gain only made modest in roads into returning to a leadership role.

Small Caps Add To Gains

There wasn't a whole lot of action in markets today. The absence of selling is good news for bulls (more so than the absence of buying is good news for bears). The Russell 2000 was one exception as it gained 0.6%, closing near its highs. Watch for a MACD trigger ' strong buy' in the coming days. The relative performance of the index continues to outperform. The Nasdaq wasn't far behind as it made small gains, but enough to finish near the highs of the day. While the percentage gain was small it did finish with confirmed accumulation. Large Caps had the quietest day of the lead indices, effectively holding station. However, the action does appear to favour bulls (speaking as someone with a non-confident, but minimal risk, short position in play). For tomorrow, it will be a chance for bulls to spread the love from Small Caps and Tech to Large Caps (taking my short position with it). I would like be to wrong, but tight action suggests the next grind will be

Post Labor Day Buying

Tuesday's action came as a bit of a relief for bulls worried the return of Traders from their holidays would kick start a wave of selling.  For a while it had looked like sellers were about to get what they wanted with a picture perfect break from tight action (in the hourly chart), but it came back strong to close near highs. For example, the Dow showed this reversal nicely.

Small Caps Breakout

In the end it proved to be a relatively lacklustre Friday with only Small Caps making the break. Weaker than expected jobs data had looked like it was going to be a catalyst for a breakout move, but in the end there was only one index showing some positivity into the Labor day weekend. Small Caps had been the relative leader compared to the S&P and Nasdaq over the last few weeks and this showed itself on Friday's strong finish. Next step for bulls is the MACD trigger 'buy'.

Second Day of Recovery Buying

While there was little net change, intraday action is setting up nicely for bulls. Tomorrow's jobs data may be the catalyst to break markets from tight action and push to new highs. Today's spike low in the Dow found support at its 50-day MA.


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