Swing Lows Take Shape Across Indices

Today effectively confirmed the swing low is in development across indices, but it's still early days if today's buying is to be reflected in a rally. The first challenge is to make it back to the last swing high. 

For the Nasdaq, this means mounting a challenge of 16,000 as the 200-day MA has played as a launch point for this swing low.  Technicals remain net negative. 


The S&P continues to honor channel support (for a fourth time).  Buying volume was down on yesterday but it was enough for it to close above its 50-day MA.  Technicals are mixed, but stochastics are above the bullish mid-line. 

The Russell 2000 defended the double bottom in what is now looking like a triple bottom. Technicals are net bearish but the index is outperforming the Nasdaq (but not the S&P).  It shouldn't take much to make it back to a new test of its 50-day MA, but getting past it will be a more difficult task.


Of the three indices, the Nasdaq is perhaps the one to watch here. Normally, I would be looking at the Russell 2000, but this index is still within its trading range, while the Nasdaq has breached its rising channel.  If the Nasdaq is able to make its way back to former channel support - now resistance - it will become a significant test and a potential shorting opportunity. 

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