Neutral Day for Indices
Markets were unable to build on premarket gains, but did manage to finish the day where they started.
The S&P closed with a narrow range doji, a doji which finished below Friday's bearish black candlestick. The pattern of the last five days is playing more in bears favour, but with support around 2,115 holding there is still a chance a broad swing low is in play; confirmation comes on a move above 2,160. Trading volume sided with bulls on a confirmed accumulation day.
The Nasdaq was able to push above Friday's highs, although weak afterhours action from Intel is likely to put a dampner on action tomorrow. With moving averages converging overhead, the likelihood of a more extended move lower increases. The presence of two black candlesticks in close proximity is bearish.
The Russell 2000 is attempting to build a rally from 1,210. Of the 'low risk' long opportunities this is the best for longs, but as action is showing a squeeze with lower highs it would need a push above 1,220 to offer bulls confidence a low is in fact in place. While technicals are bearish, they are oversold enough to mark a bottom. The most bearish action comes from the relative performance of the index to its peers.
For tomorrow, things remain precarious for bulls, but until there is a confirmed break of last week's lows there isn't reason to become a seller or go short either.
You've now read my opinion, next read Douglas' blog.
I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for "fallond".
If you are new to spread betting, here is a guide on position size based on eToro's system.
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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
Dr. Declan Fallon is the Senior Market Technician for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.
The S&P closed with a narrow range doji, a doji which finished below Friday's bearish black candlestick. The pattern of the last five days is playing more in bears favour, but with support around 2,115 holding there is still a chance a broad swing low is in play; confirmation comes on a move above 2,160. Trading volume sided with bulls on a confirmed accumulation day.
The Nasdaq was able to push above Friday's highs, although weak afterhours action from Intel is likely to put a dampner on action tomorrow. With moving averages converging overhead, the likelihood of a more extended move lower increases. The presence of two black candlesticks in close proximity is bearish.
The Russell 2000 is attempting to build a rally from 1,210. Of the 'low risk' long opportunities this is the best for longs, but as action is showing a squeeze with lower highs it would need a push above 1,220 to offer bulls confidence a low is in fact in place. While technicals are bearish, they are oversold enough to mark a bottom. The most bearish action comes from the relative performance of the index to its peers.
For tomorrow, things remain precarious for bulls, but until there is a confirmed break of last week's lows there isn't reason to become a seller or go short either.
You've now read my opinion, next read Douglas' blog.
I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for "fallond".
If you are new to spread betting, here is a guide on position size based on eToro's system.
---
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
Dr. Declan Fallon is the Senior Market Technician for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.
