Relief Rallies stall for now

No surprise given the selling which has come before that the nascent rallies now find themselves moving into areas of prior supply. Today's candlesticks are not great but are more neutral in tone than outright bearish.

For the Nasdaq, we had a bearish 'black' candlestick below all key moving averages. Supporting technicals are all bearish and there hasn't been enough of a recovery in relative performance to suggest this bounce can last much longer.  


The Russell 2000 had managed over the latter part of December to make up some lost ground against the Nasdaq, but today's bearish cloud cover means its once again underperforming relative to the Nasdaq. If the triple bottom around $212 ($IWM) is lost then it could get ugly for this index.


The S&P finished the day with a doji just above major support of 4,700. The candlestick is neutral but after the gains from the start of the week it's a little disappointing. The index is outperforming both the Nasdaq and Russell 2000 although technicals are mixed with stochastics/momentum still on the bullish side of the fence. 


For tomorrow, a close above today's highs would negate the neutral outlook for the indices. A close below today's lows would bring more pressure on the recovery - particularly for the Russell 2000 which already took a significant hit today. 

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