Solid, Low Key Gains for Markets

Nothing spectacular from markets, but the risk of breakout failures eased with today's gains. Best of the action came from the Nasdaq as the risk of a potential 'bull trap' declined. I would like to see the MACD trigger 'sell' reverse to confirm the breakout, but I was happy not to see the 20-day MA undercut which would have just extended the prior consolidation and keep traders reluctant to get involved.


The S&P bounced off the 20-day MA as other indices gained. Volume climbed to register as accumulation as traders perhaps continued to edge in favor of Large Caps.


The Russell 2000 made a welcome recovery but the 'bull flag' remains under pressure. Relative performance continues to deteriorate. A long-term rally needs Small Caps participation and we are still some way from seeing it - this is perhaps the only negative to today's action.


For tomorrow, markets need to continue to push away from support and hit all-time highs. Small Caps have work to do to make up ground on the other indices and they are a bit of a black spot to the health of the broader market rally.


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

Share on StockTwits

--- Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.
Follow Me on Twitter

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

Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more