Nasdaq losses accelerate

The potential 'bear traps' quickly stalled and sellers again returned to the fore. Selling in the Nasdaq undercut the lows of the 'bear trap' with a finish on the low of the day.  There was also a 'sell' trigger in On-Balance-Volume.  The wide intraday bar marks a change in the action since the beginning of this rally in November and today's volume marked a return to distribution,.

There was a similar sell off in the S&P, although there was no undercut of the swing low. It finished the day on the 50-day MA with well established 'sell' triggers for the MACD, On-Balance-Volume and ADX. Only stochastics are bullish, but while not overbought they are someway from the mid-line - further selling likely.  The index still has yet to outperform the Russell 2000, but there is a migration away from Small Caps to Large Cap stocks


Of the Russell 2000, it still clings to trendline support and what amounted to a relatively quiet day for the index (unlike for the S&P) with an intraday range typical of what's happened before. Despite this recent trading volumes has strongly sided with bears and On-Balance-Volume is in freefall. 


Action in the Nasdaq has directed itself towards a period of more sustained selling, although the Russell 2000 remains in denial. None of this is unusual for a rally of this maturity (in the context of its run from November), so it's more of a question as to where swing lows may be established; for the S&P and Russell 2000, this is likely to be mid-line stochastics, although the Nasdaq may instead turn oversold before it reaches its low. 

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

Bull Flags for Nasdaq and S&P

Image
The last few days have seen the S&P and Nasdaq consolidate their bounce with 'bull flags'. Both markets are coiling in preperation for a follow through move - presumably higher.  In the case of the Nasdaq,  we have 'buy' triggers in the MACD, On-Balance-Volume and +DI/-DI - although stochastics are struggling to cross the mid-line. The index is outperforing the S&P which should favor a move higher and a challenge of the 50-day MA. 
Read more

"Inverse Hammer" on Russell 2000 Breakout

Image
It was a mixed day for indices with the first indication of a top for the current advance with reversal candlesticks coming into play off opening gaps in markets. The Russell 2000 is looking the most vulnerable as it finally manages to break past the June swing high. With the 'inverse hammer' we have the risk of a possible gap down Tuesday, which would result in an 'evening star' and a likely "bull trap" - feeding into the likelihood of a larger sell-off. 
Read more

'Bear Traps' for the Nasdaq and S&P as Russell 2000 holds above support

Image
Buying in the Nasdaq and S&P delivered important 'bear traps' which in part, probably fueled today's gap highers in these indices. There is still alot of work for bulls to do, not least drive breaks of downward channels - not to mention, clear the first of the key moving averages in the 20-day. But it does give indices some respite from the grinding selling of the last couple of months.  The buying in the Nasdaq didn't register as accumulation, but there is a slow improvement in the technical picture with an upcoming 'buy' in the MACD.
Read more

Archive

Show more