Support Holds Despite Weekend Futures

After posting yesterday - then seeing the state of Futures Sunday evening - I thought I was going to be left with egg on my face, but support was well defined on Friday and today's action effectively confirmed these levels as working support.  Of course, we can still go lower from here, but given the economic state of Russia and the war in the Ukraine, today's action was very tepid. 

The Nasdaq is about to run into its first piece of price resistance at the 20-day MA, but it does have a 'buy' trigger in its relative performance to the S&P, not to mention a (weak) 'buy' signal in the MACD. 

The S&P similarly confirmed its support level responsible for the 'bear trap'.  The index closed lower, but it doesn't have the early 'buy' triggers of the MACD or relative performance against peer indices to suggest it can lead out a rally.  However, it can still defend what it has. 


The Russell 2000 continues to shape a double bottom with January/February swing lows, but the neckline needs to be breached.  It does have the benefit of a relative performance advantage over the S&P and Nasdaq, along with 'buy' triggers in the MACD and On-Balance-Volume. Also, the closer it comes to confirming the double bottom, the sooner it will negate the measured move target around $169. 
 

Remember, the news will always be bad when markets are down. So it's not a guarantee every bit of bad news will result in a market sell off.  Markets are looking a little more resilient, and with a bit of luck, Ukraine will come out of this a member of the EU one day. 

You've now read my opinion, next read Douglas' blog.

Get a 50% discount on my Stocktwits premium account with 14-day free trial. Use coupon code fallondpicks at Fallondpicks Premium to get the discount.

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