Thursday, May 23, 2019

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.


The Nasdaq also broke down from its consolidation, but it's also an index under-performing against the S&P.


The Russell 2000 is down at support, but it doesn't look like it wants to hang around this level.  If we are looking at a sideways consolidation then further losses below 1,500 are not permitted and a bounce is needed tomorrow.


Bulls have the Dow Industrials to lean on. The index closed at its 200-day MA with a possible double bottom. The day did finish with confirmed distribution but did see a further uptick in relative performance versus the Nasdaq 100.


The Semiconductor Index finished the day just below the 200-day MA, but did manage a bullish hammer and a successful channel support test. This is another potential bounce candidate for bulls on oversold conditions.


For tomorrow, bulls have the Semiconductor Index, Dow Jones and maybe the Russell 2000 to work with. Bears will be looking for an acceleration of losses in the S&P and Nasdaq. If I was to edge in favour of one side it would be bears, so the opening 30 minutes of trading will be important.


You've now read my opinion, next read Douglas' blog.

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Investments are held in a pension fund on a buy-and-hold strategy.
 
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