Monday, September 12, 2022

Four straight days of gains on falling volume

This bounce has gone through 50-day MAs and is now challenging 20-day MAs for the S&P, Nasdaq and Russell 2000.  Since the swing low was established last week indices have rallied without pause.  At this stage, we would want to see how markets react to when sellers return.  For the early part of the day it looked like we were going to get that mini-top reversal candlestick, but instead, all indices were able to close at highs. 

Gains in the Nasdaq were enough to see a 'buy' trigger in the ADX, although there is still need for a few more days of gains before technicals turn net positive - something we may not see.  The index is also underperforming relative to the S&P, but is close to a signal crossover in this regard (towards outperformance). 

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Fibonacci bounce chalks up a third day on close above 50-day MAs

Bulls will be happy the bounce managed to add another day, but the buying volume remained disappointing. However, we did see easy breaks of 50-day MAs, which opens up moves to 200-day MAs and/or August highs.  Whether we ge there will largely be determined by buyers stepping in with volume, but we can let price action drive momentum for now.

The S&P added to the bullish momentum with a new 'buy' trigger in the ADX, but other technicals remain bearish.  The index is just above holding on to its relative performance advantage against the Russell 2000 - but is on the verge of an underperformance switch to this index.  The other indicator to watch (which I don't mention much) is the Rate-of-Change (ROC).  If ROC can return above '0' it would mark a cyclical return for bulls. 

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Thursday, September 08, 2022

Fibonacci support bounces lack volume

The last couple of days are a bit of a mixed bag.  We got the last-chance-saloon bounce that markets needed if not the enitre move from June lows was to retrace, but the volume for some of the indices wasn't exactly crying out in buyer demand. 

Starting with the Nasdaq, there really was very little buying volume today as the index gained less than 1%. We have a 50-day MA overhead which didn't offer a whole lot of support when it was tested last week, but it may be more troublesome as resistance.

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Wednesday, September 07, 2022

Russell 2000 suffers heaviest loss as selling continues

Friday's selling continued into Tuesday, with the Russell 2000 experiencing the worst of the losses.  Indices are fast running out of support with Fibonacci retracements under threat after today's losses; this has become most apparent in the Nasdaq but no index is safe.  The Russell 2000 is looking the most vulnerable as today's bearish candlestick has the look of a continuation move.

The selling in the Russell 2000 has only just delivered a loss of stochastic midline support which adds to the pressure on bulls and means we are looking at a return to the bear market phase which has dominated throughout 2022. 

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