Showing posts from January, 2020

Buyers Return

The gap down at the start of the week is still the dominant pattern but today helped stabilize the losses. Indices did have support to work with, the Dow in particular is still trading inside its channel. The Dow has been chugging along channel support with today's buying registering as accumulation. The MACD is on a trigger 'sell' along with a 'sell' trigger in the ADX.

Recovery from Yesterday's Gaps; Nasdaq and Dow at Channel Support

Well, it has been two days since the last post and yesterday's open started with a big gap down which started the day for the S&P below channel support (and the prospective buying opportunity), but has now left the Nasdaq in a possible buying opportunity. For the S&P, the gap down may have been enough for value buyers but the break effectively kills the rally and likely starts a new sideways consolidation. The MACD trigger 'sell' expanded with a new 'sell' trigger in the ADX.

Small Caps Break Support

Not since September of last year have we seen a selling day like Friday's. Hardest hit of the indices was the Russell 2000 as it broke below support of its rising channel. It remains above breakout support of $158s, but with new 'sell' triggers for the MACD, On-Balance-Volume and ADX. Relative performance versus the Nasdaq has been in freefall since mid-December and Friday's action didn't help. However, the weekly chart is the one to watch if you are holding long, and with 20- and 50-week MAs running closely aligned there is support to work with.

Small losses on light volume

A slow start after MLK day led to minor losses for markets. Technicals remain positive with the S&P enjoying a sharp uptick against Small Caps which experienced a loss (although not a great loss).  Indices remain defined inside existing rising channels, or in the case of the Nasdaq, just above. The lack of a significant loss in the S&P helped keep the indices inside their narrow channel.

Nasdaq Accelerate Rally

The Nasdaq is accelerating through channel resistance as relative performance continues its run of good form. Technicals are all good as Friday's action registered as accumulation.

Small Caps Make Hay

It was another good day for indices with Small Caps taking the title as "Index of the Day". Small Caps have been feeling a little left out as 2020 rolled in (based on relative performance to Tech and Large Cap Indices), but today saw some of this lost ground returned. The Russell 2000 (through the $IWM ETF) still has to reverse the MACD 'sell' and it will need more than a few days of gains to reverse the relative underperformance. Volume was a little light, but this can build if these gains continue.

Friday's losses reverse with Nasdaq acceleration kicking off

The week started brightly, although buying volume was light. However, the Nasdaq is looking to accelerate its rally as today's gain pushes against channel resistance. Given broad technical strength I would look to see a break by the end of the week.

Small Losses Friday Don't Stop Rallies

Friday's action saw a small loss against what was a positive week for indices. Volume was light, reflecting a lack of conviction on the part of holders to want to take profits.  Although it was probably more a case of a break in buyer activity, for what was a gradual increase in trading volume for 2020  as Traders work their way back from holidays. The S&P remains in good shape as relative performance picks up the pace. The MACD is a little flat but other technicals are looking good.

S&P Bounds Along Support, Nasdaq Bounds Along Resistance

Overall, it was a good day for indices despite Middle East tensions.  The margins are small, but the S&P is moving nicely along rising trendline support, while the Nasdaq is running along upper resistance. The S&P is enjoying a relative performance advantage although the MACD has drifted into a 'sell' trigger. Other technicals are good and price action is strong. Volume inched higher as accumulation.

Markets Make Up Lost Ground

Markets were able to make up some of the lost ground from New Year's early losses. There was no great damage done up to today, but today's action did register as accumulation. For the S&P, the latest rally is from an adjusted rising trendline which was used as support today. However, today's rally wasn't enough to prevent a MACD trigger 'sell'.

Russell 2000 Breaks From Rising Channel

It sounds worse than it probably is, but the Russell 2000 dropped from its prior rising support trend but still managed to hold above $162.33 ($IWM) and in all likelihood is moving to a new sideways consolidation pattern - but for now, must be considered a breakdown until price action can be determined. Technicals show a MACD trigger 'sell' and a relative performance loss.

Happy New Year!

Getting back into the swing of things. I offered a yearly outlook here  but this post will focus on the daily charts.  It has been more of the same for indices since the pre-Christmas break. Small gains have helped maintain the breakouts established in early December. Volume has been typically light and should pick up into next week. The S&P has continued to hold to its bullish technicals with relative performance now in the ascendancy (versus the Russell 2000).


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