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Bulls Were Unable To Build On Morning Optimism

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After the Fed driven sell-off that delivered support breaks for some of the indices there was an attempt by bulls to stage a bounce, but traders weren't able to build on the sizable opening gaps, and some indices drifted lower by the close. The Russell 2000 ($IWM) lost the most ground off the open. However, today's close was enough to regain support, leaving yesterday's action as a potential 'bear trap'. Technicals are net bearish oversold. And today's buying volume was below yesterday's selling (distribution). The S&P finished the day where it started, which is also 20-day MA resistance. Aggressive traders could go with a swing trade as the next move could be sizable (particularly if the move is higher). The Nasdaq is dominated by the trading range, but within that we have a consolidation triangle. As it stands, the index is at resistance of this triangle, and given recent selling volume I would be looking for a move to close today...
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Nasdaq Surge Delivers Breakout

So much for the questionable breakout in the Nasdaq or the potential short play in the S&P, both were swotted away with substantial gains in each index. There remains doubt across both indices, but if each are able to retain the bulk of their gains over the coming days then the bearish thesis will be much weakened.

The Nasdaq was the biggest mover over the past couple of days was the Nasdaq. The doji breakout was a non-issue and those who bought the 26K tests will be sitting pretty. Today's gain was enough to register a new high breakout, but it's vulnerable to a 'bull trap', particularly if sellers are able to drive the index back below 27K. However, we did see a new MACD, On-Balance-Volume, and +DI/-DI 'buy' signals, returning technicals to a net bullish state.

The S&P had looked like it was going to stall out at its 20-day MA, but instead it delivered a big surge - liekely driven by short covering - but it hasn't yet broken out of its trading range. Today's loss was small, but remains below resistance. However, today's gain negated the bearish technicals for the MACD, On-Balance-Volume and +DI/-DI.

The Russell 2000 ($IWM) made modest gains over the past couple of days, but not to the extent that the Nasdaq and S&P delivered. Today's buying registered as accumulation, but ended in a neutral doji. However, this still looks like a trade worthy swing low, although it could still morph into a sideways pattern.

The equal-weighted S&P closed with a neutral doji as part of its swing low. It didn't enjoy the gains of the S&P over the past couple of days, but ironically, it may be more bullish given it's working off an oversold state.

Bitcoin had delivered a confirmed break of 82.5K yesterday as it looks to build a broader right-hand-base. There is still plenty of work to do, but 82.5K should be strong support going forward. Trading volume has picked up substantially since mid-August, and technicals are firmly in the green. Should indices stall out in their advances, then there will always be Bitcoin to take their money.

Semiconductors are also on the move again. There is support at 10K and recent action points towards a new rally back to 14.5K. Bulls need only watch for the potential of a 'bull trap', but otherwise, the broader bull move looks to be back in play.

It will be interesting to see if Nasdaq and S&P gains can be maintained? There wasn't a broad advance across indices or in the equal-weighted equivalent, but price is king. Broader trends are bullish, and until we see a substantial change in this, my outlook remains bullish.

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

Popular posts from this blog

Bulls Were Unable To Build On Morning Optimism

Image
After the Fed driven sell-off that delivered support breaks for some of the indices there was an attempt by bulls to stage a bounce, but traders weren't able to build on the sizable opening gaps, and some indices drifted lower by the close. The Russell 2000 ($IWM) lost the most ground off the open. However, today's close was enough to regain support, leaving yesterday's action as a potential 'bear trap'. Technicals are net bearish oversold. And today's buying volume was below yesterday's selling (distribution). The S&P finished the day where it started, which is also 20-day MA resistance. Aggressive traders could go with a swing trade as the next move could be sizable (particularly if the move is higher). The Nasdaq is dominated by the trading range, but within that we have a consolidation triangle. As it stands, the index is at resistance of this triangle, and given recent selling volume I would be looking for a move to close today...
Read more

Bitcoin Surge As Russell 2000 Shapes A Swing Low

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Bitcoin is again on the move, looking more bullish than my initial "bullish outlook". I had looked for a more pronounced 'bear trap' on a duck to the 50-day MA, but instead buyers stepped in and shorts were forced to cover buy. This is excellent right-hand-base development on the longer weekly chart, and it's hard not to see Bitcoin challenging $125K by 2028, if not sooner. It will still be volatile, but long-term investors waiting for a new entry opportunity should wait for prices to narrow again in low volume, then buy-and-not-look-back. Long term buyers should not get sucked into the daily machinations of cryptocurrencies, and should have a proper long term outlook of years - not months or weeks... Anything shorter will need to use adequate risk:reward. If I was to stick my neck out, I might look for $100K for end-of-year and measure risk based on that target. As an asset, I hate cryptocurrencies (and the sphere around them), but they do appear to be influenc...
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