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Showing posts from May, 2017

Volume Selling Pickup But Breakouts Hold

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After a couple of weeks of light trading volume picked up as seller returned to markets. However, sellers were unable to reverse market breakouts. The S&P tagged 2,403 at the low of today, but recovered to leave it halfway between recent highs and 2,400. Technicals are net bullish with the MACD slowly building on its recent 'buy' trigger.

Support for Russell 2000 collapses

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There was little of note today with the exception of the Russell 2000. The blog headline is a bit to click-bait, but in relative terms, the Russell 2000 suffered the largest loss. The Russell 2000 took sa 0.8% hit as it bounced away from lead moving averages. The index is still caught in a larger trading range which weakens the significance of today's selling - but in a day of little change, today's Small Caps action gathered attention.

Friday Kept Week's Performance Intact - Semiconductors Strong

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Memorial weekend brought with it holiday style trading on Friday. It was positive finish for bulls who were able to maintain and in some cases, build on, gains from earlier in the week Best of the action came in the Semiconductor Index which finished with a new closing high. The rally from April brought with it an acceleration in pace, comparable to the latter part of 2016.  Relative performance against the Nasdaq 100 hasn't breached resistance, but it's very close. Semiconductors spent a long time in the doldrums after the 2000 peak, but they are finding their groove now.

S&P Breakout on Higher Volume Accumulation

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While I expected the Dow Jones to be the breakout flyer, instead it was the S&P which led the charge on higher volume accumulation.  Technicals are all in the green with a return of the MACD trigger 'buy'.

Rally Keeps Going But New Highs Await

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The S&P is only a short step away from confirming new highs, but today's action will have kept shorts wary with the risk of whipsaw high. A simple push above 2,406 could deliver an acceleration higher. The one disappointment is the light volume.

Market Rallies Slow Down

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For the fourth day in a row, markets generated gains to leave markets on the verge of new highs - erasing the losses of last week. However, today's gains were small leaving markets vulnerable to attack from shorts. The Nasdaq and Nasdaq 100 finished with bearish black candlesticks; black candlesticks at swing highs are often associated with market tops. Shorts can look to take advantage with stops above the recent highs with a target of last weeks lows (for starters).

Gains Push Into Breakdown Gap

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While today's gains were modest they were significant in generating clean pushes inside last week's breakdown gaps. This brings indices back to challenge 'bull traps' The S&P experienced lighter volume trading as On-Balance-Volume moved to a 'buy' trigger. Today's action opens up for a challenge of 2,405, although shorts may see this as opportunity to go aggressive with a tight stop once markets makes all-time highs.

Relief Rally Approaches Resistance

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Wednesday's gap created a significant reversal, stalling the mini-rallies kicked off in April. Thursday and Friday generated some come back against last week's loss, bringing many of the markets back to the highs of the gap down. The S&P is in a position where shorts may look to attack the gap. Friday's spike high put itself inside the gap, recovering the 50-day MA in the process. This gain was supported by a 'buy' trigger in On-Balance-Volume. While shorts might have the better risk:reward option, a move above 2,389 opens up for a retest of 2,405.

...And Then Things Went Pear Shaped

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After days of steady gains, it was surprising to see the level of selling on show today; the last day like today in the markets was last December. How today plays out in the long term is still up for grabs as key trading ranges haven't been breached. Shorts will be watching for opportunities, but what followed last December was another kick start for the rally - bulls have a reason for optimism. The biggest reversal was in the Semiconductor Index. Yesterday's 1.5% gain was whipped by a 4.4% loss. The attempt to break out of the rising channel was snapped away, putting the breakout gap from last week under pressure.

Semiconductors Keep on Rolling

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It was generally a quiet day for the indices but the Semiconductor Index added another 1.5% as money continued to flow into Semiconductors. Today's gain leaves the index up against resistance and ready to breakout.

Semiconductor Index Post Follow On Gains

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While not one of the primary indices, Semiconductors experienced a strong day of gains - backed by strong technicals. This index is well on its way to shaping a new rally for 2017, following through from the rally kicked off on Trump's election. Bulls have their index to follow for the summer.

Small Caps See More Aggressive Selling

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Trump's Russian shenanigans didn't move the market as much as such actions in the past may have done but not all markets escaped such interest. The Russell 2000 took the brunt of Friday's selling.  The 'bear flag' off former support, now resistance, followed through lower to bring the index back to a flat-lined 50-day MA.  Technicals are mixed with 'sell' triggers in the MACD and +DI/-DI. Relative performance accelerated lower after months of underperformance. Small Caps are key bull market leaders but there has been a distinct lack of interest from buyers for the last 6 months and this is not good news for other markets.

Underwhemling Response to French Election Results

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It was probably too much to ask for an election result which is closer to maintaining the 'old' status quo than spark anything radical. However, it does offer continuity for markets which should prove favorable down the road. While there was little reaction to the result, markets continue to maintain their bullish stance. The S&P is above its trading range and holding its breakout with a narrow doji. Volume remained light in line with Friday's.

Rallies Resume

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After a relatively quiet week markets finished strong on Friday. This helped push markets out of their trading ranges for the last few days. Volume was subdued but this won't matter if there is some follow through on Monday. The S&P has broken from its narrow consolidation which had bumped along just below the previous high of 2,400.  Current action looks very healthy with technicals supporting price action; a loss of 2,380 would push things back into a consolidation, but not enough to send long-term holders running.

Technicals Net Bullish Across Indices

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All lead indices are net bullish in technical strength as markets consolidated last week's gains.  The S&P has posted a series of doji/hammer after emerging from a bullish 'flag' / downward channel.

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