Showing posts from May, 2019

Russell 2000 Breaks Range Support

It didn't happen today, but the Russell 2000 didn't waste any time losing 1,500 support. With technicals oversold there is a chance this could evolve into a larger crash but other indices aren't showing the level of weakness which could offer this scenario.  Not surprisingly, relative weakness ticked lower despite its recent relative strength.

Distribution Sweeps Markets

Traders returned from the Memorial weekend in selling mood. Indices, already net bearish technically, suffered further losses on higher volume distribution. The S&P is on course to test its 200-day MA, although relative performance continued to accelerate against its Russell 2000, which will be a cold comfort for current longs, but may be enough to prevent losses from getting too bad.

Russell 2000 Defends Support

Friday was a bit of a mixed bag. The Russell 2000 was able to defend horizontal support as it continues to build a sideways pattern. While it trades sideways it will keep other indices in check until there is a confirmed directional turn - either a break of current support (for bears) or a rally back to, then beyond 1,615 resistance. With the Russell 2000 caught inside a trading range, the breakdowns in the S&P and Nasdaq are caught in a bit of a no-mans land. As the Russell 2000 failed to break its support, both the S&P and Nasdaq are vulnerable; not just to additional losses, but also to a 'bear trap' and a rally through their respective consolidation triangles. While the Russell 2000 defending support, Semiconductors are heading in the other direction with an undercut of the 200-day MA. Further losses in this index will drag the Nasdaq and Nasdaq 100 with them. Finally, the relationship between Transports and the Dow Jones Index continued to struggl

S&P and Nasdaq Breakdown

Today's losses ranked as a breakdown of the consolidation triangle in the S&P and Nasdaq. Volume climbed to register as distribution for both indices. Technicals are already net bearish.The one caveat is the surge in relative performance of the S&P against the Russell 2000.

No change part 2

With Trump Trade Wars in full swing, markets were remarkably sanguine. It's still a mixed bag of bullish potential in the Russell 2000 and bearish malaise in the Semiconductor Index. Having said that, it wasn't a great day in the Russell 2000. The Russell 2000 gave back most of yesterday's gain and is set for a push below 1,521. If this happens it will set up for a new swing low and confirm a new channel trend lower.  Technicals do not inspire as it also lost relative ground against the S&P.

No change as Markets trade within a range

Markets made minor gains, but the action of the last few days has not managed to clear the consolidations created near the moving averages. In the case of the S&P, the index is trading around the 50-day MA. Volume was lighter on the upside but technicals are net bearish but not oversold. If this is to be a swing low there isn't much room for maneuver and bulls need to follow through higher over the next few days.

Indices Rebuffed at Moving Averages

Friday saw indices turned at moving averages after Thursday's tests. Volume was light, so it may be a mix of profit taking and some aggressive shorts. In the case of the S&P, the bounce in the market was not enough to reverse the bearish technicals and may have even pushed them into a shorting zone. The 50-day MA is acting as resistance. On the plus side, there is a continued advance in relative performance against the Russell 2000.

Bounce sees markets challenge moving averages

Since the Tariff sell off markets have managed to pull themselves back to the moving averages broken by that sell off. Buyers of the bounce off the 200-day MA in the Dow Jones Average are sitting pretty with another 100 points on offer before the 50-day MA is tested. Volume is light and technicals are mixed, but there has been a recovery 'buy' trigger in On-Balance-Volume.

Technical Damage Across Markets

The to-and-fro of the US-Chinese trade war has left markets in a bit of a grey zone and facing uncertainty after holding moving average support. The S&P undercut its 50-day MA on higher volume distribution, but it also came back with a relative performance improvement. Technicals are net bearish.

Yesterday's losses remain dominant

Today's action was relatively tight and held inside the range of yesterday's losses. While losses weren't great, the Russell 2000 did suffer the most of lead indices. Having said that, converged 20-day, 50-day and 200-day MAs remain support, although the MACD switched to a 'sell' trigger. Even if this support is lost the likelihood of a trading range emerging off the 1,494 swing low is still quite high.

Russell 2000 Continues to Perform Well

The morning gap down on Chinese trade war fears was painted over by some decent buying action over the course of the day. Best of the action was reserved for the Russell 2000, which is now starting to outperform the S&P and Nasdaq; this is good news for bulls for all indices. Technicals are in good shape but I would like to see the MACD expand upwards.

Market rallies slow with trend breaks but Small Caps find support

Shorts may think they have their reversal but the last such break in March quickly reversed higher. Volume was light even though technicals weakened with MACD 'sell' triggers for key indices. The S&P has started to see its MACD trigger line accelerate lower after weeks of flat-line behaviour. The S&P has also switched to a point of underperformance against the Russell 2000; this is bullish for the broader market even if it's bad news for the S&P in the near term.


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