Showing posts from November, 2018

Bottom Building Picks Up The Pace

The Fed stepped in at a good time with positive comments on rate increases as markets put some distance on recent swing lows. All markets now have a bit of wiggle room to defend and with seasonal 'Santa Rally' ready to kick off then we yet have more good news to come. The biggest one-day gain was the Nasdaq 100, it gained over 3% on higher volume accumulation. These gains came with a bullish cross in relative performance against the Russell 2000 and 'buy' signals for the MACD and On-Balance-Volume.  The first test will be the convergence of 50-day and 200-day MAs around 7,100.

Markets continue to shape a swing low.

Today was a good day for market bottom watchers as new support levels kicked in for indices. Best of the bunch looks to be the Russell 2000.  It still has a relative performance advantage and the bottom it's shaping came off a 'real body' bounce alongside a fresh MACD trigger 'buy'. It's early days, and the 'buy' signal I had marked as a retest was perhaps a little early but should still be good enough that such buyers will still be holding at this stage; stops on a loss of 1,465.

Russell 2000 digs in again - Fresh 'Buy' for Thanksgiving

It could have been better but bulls should be happy with the work done in the Russell 2000. Yesterday's close pushed the index into the 10% zone of historic weak action (reached in October 2018) while also confirming a double bottom on a two-bar reversal. It's a second 'buy' signal after last Thursday's failed.

Long Term Investors Get Another Bite But Traders Under Pressure

A mixed bag of action. Long-term investors can look to the losses in the Russell 2000 and Nasdaq as another accumulation opportunity but if you bought Thursday's bullish piercing pattern of the Nasdaq as a near-term trading opportunity you will likely have been stopped out - or feeling ready to flee. As a trading opportunity, the Russell 2000 is just above its stop zone (loss of Thursday's piercing pattern low). The MAD is still holding its 'buy' trigger along with its relative performance advantage, but ROC is accelerating lower - moving deeper into bear market territory. Investors shouldn't fear the noise and keep on dabbling a little here and there on the buy side.

Confirmation of October Lows Continue

Thursday began the confirmation of October swing lows with bullish piercing patterns and Friday kept this momentum running - even if there is still lots of work to do. The S&P closed at Thursday's highs and kept away from the latter's lows. Volume was a little lacking but technicals, aside from the MACD, are bearish. Monday's edge favors bulls.

Bullish Piercing Patterns on Accumulation: Investor Buy

The developing (major) swing low got a big boost with another sizable wide range, bullish piercing pattern - similar to the bullish reversal candlestick from October 31st. Again, cautious investors who have been buying the extremes should still be active, particularly in the Russell 2000. Yes, new lows are possible, but nobody can predict the future and you can only act on the present - and now is a good buying opportunity. The Russell 2000 was able to defend the mini-congestion zone from the end of October (the horizontal, blue hashed line). Rate-of-Change is still in the bear zone but relative performance is still positive and the MACD is clinging to a 'buy' trigger.

Rallies intact despite recent losses

After returning from my brief vacation markets enjoyed decent gains which - over the last 3 days - have given back some of the advances. However, markets remain well positioned to confirm a swing low (even if October lows are breached) and investors should be buying stocks, particularly on days where losses of over1% or more are registered. Remember, this is buying for 5 years+ down the road - don't fret the daily noise. For pessimists, there is the Semiconductor Index and Copper prices.  Copper prices broke before Semiconductors as lower demand for the base metal ultimately reflected itself in lower demand for chips, which is hurting and will continue to hurt the Nasdaq and Nasdaq 100. Keep an eye on this chart for a bottom. The likelihood is that more losses are on the cards for both copper and semiconductors.


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