Showing posts from June, 2022

Time for the June low retest in the Indices

Today's selling has started the retest of the June lows for the Nasdaq and Russell 2000 as the S&P gets rebuffed by its May low.  One point of concern is that none of the indices were able to mark a new swing high.  Nascent bullish technicals are also looking vulnerable to reversal. The index to watch is the Russell 2000.  If there is to be a recovery then the Russell 2000 has to do the leg work. Key here is that the index retains its relative outperformance to the Nasdaq and S&P - even if it suffers selling, as is likely from here. 

Friday's strong finish places bottom fishers in the money

There is much talk of bear market rallies - which may be true - but the longer this rally continues, the more May and June buyers will be in the money.  The real rally will come when markets can make their way back past June highs as this will place all buyers for the past 2 months in the money. For the Nasdaq we have the MACD and On-Balance-Volume on 'buy' triggers as the index works an outperformance relative to the S&P.  Friday's gain has pushed the index inside its prior trading range and with a close above the 20-day MA.  The challenge is the 50-day MA. 

Inching higher but only May consolidations been challenged

Despite putting in the groundwork for a swing low we are still not seeing a whole lot of demand for building a rally off the lows.  There should be nore upside in the tank, but once it reaches congestion from May I wouldn't be surprised if the rally stalls out - which would probably be enough to push the indices well out of an oversold condition.  With respect to the S&P, we had a new 'buy' trigger in On-Balance-Volume to go with the relative outperformance of the index against the Russell 2000.  

Buyers make an appearance, but little change

If we are going to get a swing low of consequence we are going to need days where buyers can build off opening gaps more than what was achieved today; yes, there were opening gaps - but there was little follow through higher. For the Nasdaq, the opening gap was substantial, but the resulting gains were unable to challenge the May swing lows.  On a positive front, there was a new 'buy' trigger in On-Balance-Volume to go with an acceleration in the relative peformance over the S&P.

Buyers step in as the see-saw between bulls and bears continue

Markets continued with the struggle between bulls and bears - with bulls taking Friday's laurels. Friday added a little something different as options expiration clouded trading volume, so it's perhaps a little early to say if we have confirmed accumulation to go with the buying.  The Nasdaq was one of the indices to chalk up big volume, but it wasn't enough to generate a new 'buy' trigger in On-Balance-Volume, although there was a new 'buy' trigger in relative performance against the S&P. 

Weak bounce does not a bottom make

Buyers step up to the plate and recover some of yesterday's losses, but buying volume was down on Tuesday's for some indices - and there were some losses end-of-day to keep the gains in check. I wouldn't expect much from indices tomorrow. but slow, steady gains over coming days would be good.

Russell 2000 tests May low support

It was a blowout for the Nasdaq and S&P as both indices sliced through the lows of May.  It's now left to the Russell 2000 ($IWM) to cling on to support.  The latter index lost almost 5% on the day as it gapped below rising trendline support as all technicals returned net bearish.  However, relative performance to its peers continued to improve.

Bears counter 'bull flags' with ruthless efficiency

It was not to be for what had been a relatively orderly bounce from May lows.  Friday's trading drove the nail into the coffin of the 2-week long bull flags with a 'gap-and-run' lower, which now puts the May lows under pressure. If bulls are to get out of this with the prospects of a double bottom then today or tomorrow has to see a spike low, preferably one with a wide intraday range which capitulates the last of the weak hands.  But if we see another day like Friday, then it's back to the drawing board as to looking for a bottom. For the Nasdaq, we have the May spike low of 11,035, but really, it's the candlestick real body support of 11,152 which has to hold on a closing price basis - spike lows below this are fine (and are to be welcomed). We have technical pressure with the uptick in bearish trend strength, the relative 'sell' trigger against the S&P, the 'sell' signal in On-Balance-Volume, and a weak 'buy' signal in the MACD which i

Bull Flags for Nasdaq and S&P

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. 

Black candlesticks are a warning, but not necessarily a reversal

When you see 'black' candlesticks; i.e a higher open, a lower close, but a close still above the prior day's close - you need to pay attention. The only good thing is that these warnings typically only matter when 'black' candesticks occur at the end of a rally - not in the middle of a mini-consolidation.  For the Nasdaq, the 'black' candlestick didn't undercut breakout support and volume was relatively light.  Technicals were unchanged, the index is still outperforming the S&P but we are still awaiting a new 'buy' signal in On-Balance-Volume.

Another good finish to the week

Markets have effectively cleared the first hurdle of the most recent swing high. Speculative indices - the Nasdaq and Russell 2000 - have also started to outperform the more conservative, S&P. The S&P is about to edge past declining resistance defined by the March-April highs (4,637), something the Nasdaq has already achieved, but the Russell 2000 has yet to do.  When it does it will soon come up against the 50-day MA, then the next real challenge is the 4,300 level, which was resistance at the end of April/beginning of May. 

Buyers undo last two days of selling

Today wasn't packing much volume, but buyers were able to recover the last two days of losses as the rally off May lows continues. I'm liking the action in the indices even if the tone in the world of social media remains negative. The Nasdaq rallied off breakout support with an acceleration in the MACD trigger and a new 'buy' trigger in relative performance against the S&P.


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