Showing posts from December, 2019

Happy Christmas on Triple Witch

Volume surged heading into Christmas week as Triple Witching for options expiration kicked in. Things are likely to quieten in the next couple of weeks as holiday season kicks in. The S&P added less than 0.5% but it did mean a new high for the index. The technical picture hasn't changed with all technicals bar relative performance in the green. The Nasdaq kept its rally going with an over 1% gain. Unlike the S&P, technicals are all positive along with relative performance  (vs the S&P). The Russell 2000 chugged along as it added new near term highs but hasn't yet made it to challenge 2018 highs. It doesn't look like it will do this before the year is out so this is something to look forward to for 2020. The Dow Jones has managed a little mini-breakout from the December consolidation. The only downside was the black candlestick, which is often a bearish marker at the top of a rally; for this to hold true we will need to see a gap down tomorrow.

Small Gains Keep Festive Spirit Going

Volume will lighten as Christmas approaches making it easier to push larger than normal gains or losses. Now that indices have pushed past 2018 highs (with the exception of the Russell 2000), stockholders which are holding long positions will be largely in profit - and those with shorts, holding loses. This makes it easier for markets to push more gains and allow value buyers fish around the Russell 2000. The S&P posted a small gain with technicals pointing in the right direction. The index is still losing ground against the Russell 2000 but this is no bad thing for the broader market.

Trading Quietens

With Christmas fast approaching, trading looks to be slowing into narrow, light volume, range days. There wasn't a whole lot to say about today. The S&P gained a single point although relative performance against the Russell 2000 dropped away from its trigger line. A safe hold for now.

Indices Hold Breakouts

Last week, there was an opportunity for shorts to attack the returning bounce back to the channel (which was stopped by Thursday's breakout). Now, there is an opportunity to build on breakouts and re-establish rising channels. The S&P returned a MACD trigger 'buy' with relative performance against the Russell 2000 on the verge of a new 'bullish' crossover.

Holding Last Week's Upside Gaps; Russell 2000 Poised

A shaky start to the week has so far managed to hold on to Friday's gains. The small gaps haven't filled although they are not true breakout gaps as we are still waiting for the actual breakouts. But, it's healthy action and the possible short opportunities mentioned from the drop outside of the channel don't look likely to succeed. The S&P is no longer in its rising channel but a slower advance may be emerging. The MACD is still on a 'sell' signal and relative performance remains on the bearish side.

Markets Stall Off Friday's Gain

Sellers made a return after a couple of days of gains; losses were light and on small volume but there was no desire to take markets to new all-time highs as profit takers were the more active parties. Shorts will have had a chance to take a position to then sit and see what happens - but any new high would quickly see those trades run for the hills. Shorts will be riding the S&P MACD 'sell' trigger and index relative underperformance, with a stop above 3,155.

Relief Rallies Face Challenges From Former Channels

After the channel breakdowns last week indices now face the prospect of challenging former support of these channels. Shorts may try and force the issue although any gains would be enough to see new multi-year highs and likely return many of these indices inside these channels. The S&P did register a bullish accumulation day as part of its channel challenge. Shorts will take comfort from the maintained MACD 'sell' trigger and continued relative underperformance against the Russell 2000 (although this is bullish for the broader market).

Reactionary bounce for indices

After yesterday's gap down there was a bit of a reactionary bounce to the selling.  Indices have confirmed breaks from rising channels, so now it's a question of defining how long indices will move sideways for; there is still plenty of support to work with should indices fall further. The S&P has major support at 3,025 which is close to the 50-day MA. Volume fell, in line with consolidation action. A safe Hold for now.

S&P Breaks Rising Sep-Nov Channel

It was no surprise to see indices fall to - or out of - their narrow channels as traders look to consolidate the advance. In the case of the S&P this resulted in a fresh MACD trigger 'sell' and higher volume distribution.

Russell 2000 consolidates with other Indices

It was a rare Thanksgiving Friday which didn't see indices close higher as has often been the case in recent years. However, there was no significant damage done to indices by Friday's half-day selling as junior traders ruled the roost. The Russell 2000 suffered minor losses but remained well inside the rising channel on bullish technicals.


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