Indices bounce off support on light volume

Monday's confluence of support tests was going to bring a reaction and a reaction it did. Today marked the second day of buying, but volume for today was down on yesterday and indices will soon find themselves testing the resolve of buyers of the July high - will supply / sellers return?

For the Nasdaq, today's buying was sufficient to regain its 20-day MA with new 'buy' triggers for On-Balance-Volume and ADX. 


The S&P also saw a fresh On-Balance-Volume 'buy' to go with the successful test of the 50-day MA and return close above its 20-day MA. Large Caps are outperforming Small Caps, although Small Caps are making up ground against them.


Speaking of Small Caps, the Russell 2000 bounced off channel support to again sit in the middle of its trading range.  Buying volume was light and the first point of call will be flat-lined resistance of its 20-day and 50-day MAs.  However, the trading range remains dominant - so support and resistance is all that matters.


For the remainder of the week we need to see how supply plays out for the Nasdaq and S&P as they approach previous highs. For the Russell 2000, we need to see whether support or resistance are tested again.  The 200-day MA is also a potential factor for the latter index. 

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

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

Being "Right" but still losing...

Image
I'm trying the Topstep Trader Combine as a sampler to day trading and it's an interesting setup with minimal outlay costs to get started. I'm not a huge fan of their platform UI but everything else has been pretty good so far. Today was one of those days where I waiting (and waiting) for the profit taking to kick in, but by the time sellers made their appearance I had reached my loss limit for the day and so that, was that. You can see all of my whipsaw trades here. For the record, I only work off price action, looking at support/resistance and tells like rapid stop take outs, usually a good sign for a reversal.
Read more

Big bearish engulfing patterns as positive start negated

Image
It was a setting up to be a low key day, but come the afternoon, sellers pounced and drove markets down hard after doubts raised on future rate cuts. Fed news wasn't the key takeaway, but the loss of support was. The S&P was hardest hit, not because of the percentage loss, but because of the volatility relative to recent trading action. Today marked a clear breakdown of trendline support. It should be noted, the presence of the 50-day MA offers a point of defence but today's loss does not mean we will see a crash; a time-led consolidation seems more likely. Technically, the MACD accelerated its losses and there was a fresh 'sell' in On-Balance-Volume.
Read more

Archive

Show more