Showing posts from December, 2017

Quick Post: Markets Trade Near Highs Ready For 2018

The last week of trading of 2017 looks to be ending near all-time highs, and with markets well placed to continue this form into 2018. The Russell 2000 is looking primed to jump higher with strong pressure at resistance. Of the indices, it's best placed to break higher - negating the November 'bull trap' in the process. The upper channel line is the target for the breakout.  Shorts will need a downside break of the squeeze line with a stop above 1,560.

Modest Selling

There wasn't a whole lot to say about today. Profit takers tool advantage of yesterday's gap higher to take some profits.  The Russell 2000 enjoyed the best of the gains yesterday and suffered the worst of the selling today. The selling didn't take out the MACD trigger 'buy' or the 'buy' trigger in ADX.  Support at 1,520 is also available.

Semiconductors Force Short Covering

Shorts holding on to their short positions in the Semiconductor Index on Friday were made cover today. Today offered a positive break of the 50-day MA with a gap move. Technicals improved although there is still some work to do to change the MACD and Stochastics to a bullish 'buy' trigger. The Russell 2000 accelerated its gains to effectively negate the 'Bull Trap' in a single day's gain.  There was also a new MACD trigger 'buy' to go with the +DI/-DI.  The momentum is there for a move to channel resistance and there is enough time before end-of-year for that move to happen. The Dow short play from Friday didn't get off the ground as the morning gap higher will have dissuaded new positions and forced existing shorts to cover. Volume wasn't great but Technicals are suggesting this may not be moving into a rally acceleration. The S&P gapped higher but as it wasn't a natural resistance level it didn't attract much attention. L

Tech Breakouts Brings Semiconductor Short Covering

While the S&P (but not the Dow Industrial Average) enjoyed solid gains on heavy volume accumulation it was left to Tech Indices to steal the headlines. The Nasdaq closed the week on new closing highs as volume surged.  The gains were enough to see a new 'buy' trigger in the MACD which keeps the index net bullish.

Rallies Slow As Semiconductor Selling Eases

Markets experienced early gains but gave them back by the close of business. Given the mini-rally of the past five days, some of the indices are looking vulnerable to a new round of selling. The S&P finished with a narrow inverted hammer on low volume but at new highs. A move back to the newly accelerated channel is looking favored. The Nasdaq also finished with a narrow doji but wasn't able to make new highs.  It's already close to one channel but looks more likely to reach down to the slower channel. The Russell 2000 had the best of today's action and looks to be attracting buyers at the expense of other indices. Of the lead indices, it looks best positioned to rally as it continues to challenge its 'Bull Trap'. Semiconductors remain the one index which didn't enjoy the recent run of buying but the failure to undercut 1,211 also gives bulls something to work with. If there is a rally over the next few days it may be enough to start a chall

Small Caps and Semiconductors Still in Shorting Territory

While it was good day for Tech and Large Cap Indices it was a more muddled day for the Russell 2000 and Semiconductor Index. The Russell 2000 wasn't able to enjoy the fruits of what was low key buying experienced in other indices. A second doji in a row gives shorts something to work with as the 'Bull Trap' continues to influence buyers behavior.

Semiconductor Index Offers Shorting Opportunity at 50-day MA

While most indices were able to post small gains it was left to the Semiconductor Index to post a small loss; leaving a bearish engulfing pattern at its 50-day MA and an ideal opportunity for shorts to take advantage of the new (intermediate) downward trend. In such a scenario look for stops above the 50-day MA. The flip side, if there is an early push above the 50-day MA then these same short-stops are likely to trigger an acceleration in the rally and bring fresh buyers in a new long trade; a long trade working off oversold conditions.

Tech Indices Dig In At Support

It was a relatively quiet day for markets so today was more about the working status of potential trade setups. Tech Indices are still holding to a bullish set up with both the Nasdaq and Nasdaq 100 at channel support having enjoyed small gains today.  Stops can go on a loss of today's lows if looking to take advantage of the support test.

Russell 2000 Breakout Under Pressure

The Russell 2000 break of 1,520 is under threat with today's loss. Next up is converged 20-day and 50-day MA support but such a test will confirm the breakout loss and open up for a new trading range opportunity. However, a loss of 1,450 would bring the August low into play and suggest a more significant top is in play.

Semiconductor Index Continues To Sell Off

After Friday's sell-and-recovery it had looked like there was an opportunity to play a bounce, particularly for the Semiconductor Index. However, the reality proved to be different. Instead, sellers maintained the run of form from Friday and pushed the Semiconductor Index right down to Friday's low - undercutting the 50-day MA in the process.  Monday's close delivered a net bearish turn in technicals. The slower trendline connecting the July-August swing lows is the next target down.

Indices Stage Intraday Recoveries in Wide Range Day

Volatility took a tick higher with profit taking sweeping across the broad before buyers zipped it all back up. Trump's Russian investigation will add a level of uncertainty to the Tax Cut rally and markets may take another trip into Friday's intraday low; should markets deliver a lower close Monday then it could turn into an ugly week as traders will need to defend Friday's lows  The Semiconductor Index was hardest hit last week but it was able to dig in at its 50-day MA and finish the week above this key moving average. If there is going to be a rally I would look to this index to deliver simply because it suffered the hardest level of selling and should be the most amenable to a recovery rally.


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