Markets peaked yesterday, but today wasn't one for sellers

It was a bit of an off day. The gap down had all the makings of a substantial sell off (one I tried to short), but in the end, it was longs who came out on top. The question for tomorrow is if today's action can deliver a challenge on yesterday's highs, and get past them on a way to challenge all-time highs.

The S&P is the best of the indices. The day finished flat, but today's action remained close to yesterday's doji. It's the index most likely to follow through tomorrow.

On the subject of Large Cap indices, the Dow Jones Industrial average actually pushed beyond yesterday's candlestick, although it's up against another resistance level.

The Nasdaq is next in line, although we could be looking at a bearish 'evening star' despite today's gain. Today's gain wasn't enough to prevent a new 'sell' trigger in On-Balance-Volume.

While the Russell 2000 ($IWM) has the most well defined bearish 'evening star', although the pattern typically requires a standard red candlestick as the third candlestick for the pattern (not the one delivered). It was interesting to see volume drop across the pattern, typical for a "bear flag", so I would not be suprised to see today's gains reversed. Technicals are net positive, so there is work to do if this is a bearish scenario.

Heading into tomorrow, watch the Dow Industrial and S&P indices for leads. If bullish momentum is maintained and the aforementioned indices post gains, then I would expect the Russell 2000 to push higher.

---

Follow Me on Twitter


Investments are held in a pension fund on a buy-and-hold strategy.

Popular posts from this blog

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

Big bearish engulfing patterns as positive start negated

Image
It was a setting up to be a low key day, but come the afternoon, sellers pounced and drove markets down hard after doubts raised on future rate cuts. Fed news wasn't the key takeaway, but the loss of support was. The S&P was hardest hit, not because of the percentage loss, but because of the volatility relative to recent trading action. Today marked a clear breakdown of trendline support. It should be noted, the presence of the 50-day MA offers a point of defence but today's loss does not mean we will see a crash; a time-led consolidation seems more likely. Technically, the MACD accelerated its losses and there was a fresh 'sell' in On-Balance-Volume.
Read more

Being "Right" but still losing...

Image
I'm trying the Topstep Trader Combine as a sampler to day trading and it's an interesting setup with minimal outlay costs to get started. I'm not a huge fan of their platform UI but everything else has been pretty good so far. Today was one of those days where I waiting (and waiting) for the profit taking to kick in, but by the time sellers made their appearance I had reached my loss limit for the day and so that, was that. You can see all of my whipsaw trades here. For the record, I only work off price action, looking at support/resistance and tells like rapid stop take outs, usually a good sign for a reversal.
Read more

Archive

Show more