Another strong finish to Friday; Russell 2000 approaching 200-day MA.

The volume was light on Friday, but gains were enough to negate Thursday's selling.  Markets have already recovered from the break of the loss of June's swing low, and are now looking at a challenge of 50-day MAs. 

The Nasdaq is on a 'buy' trigger, but all other technicals are bearish.  Relative performance losses have accelerated, but the broader picture is more bullish, and On-Balance-Volume is close to a new 'buy' trigger. The double October swing high is still there as resistance, but a close above 11,210 would confirm a sequence of higher highs and higher lows. 


While the Nasdaq works towards a development of a new rally, the S&P is already a step ahead having cleared the early October swing high and a close above the 50-day MA.  The next upside target is its 200-day MA - which is also close to the September swing high.  Technicals are in better shape than the Nasdaq with 'buy' signals for Stochatics, MACD and ADX.


The Russell 2000 did well to negate not just the 'gravestone' doji from Wednesday but also the 'black' candlestick from Thursday; in doing so, it's probably just a day's gain away from a test of its 200-day MA. Technicals are net bullish and Friday even ranked as an accumulation day. 


Into Friday it was looking like we had reached a natural topping point for the mini-rally and we were looking at some form of retracement - but Friday's trading blew this out of the water.  This was important for what it means for the rally, but also for confirming October's overall trading as a swing low.  The groundwork has been set for a positive end-of-year finish - it's now up to the indices to deliver. 

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