The most obvious thing to look at today was how the S&P 500 found support at its 200-day moving average. If it follows in the Nasdaq's footsteps we can expect a lot of whipsawing around that moving average in the coming weeks. So despite the index losing 1.37% today the bulls are still in pretty good shape as the index remains above other support zones like its May high and March trendline. For now it looks like it's just going through a normal consolidation of the move from the bottom of the May range.
Compared to the S&P 500 the Nasdaq has more air between it and its support levels. But it managed to hang tough today and closed near its high of the day after a late surge. It, like the S&P, is short-term overbought but that doesn't mean that it will pullback. It could stay overbought for a while or simply work off that overbought condition by going sideways for several days. Absent some news more sideways action for the market wouldn't surprise me ahead of Friday's payroll report.
No changes...
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Lat | Lat |
| Intermediate | Up | Up | Up |
| Short-term | Up | Up | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Hey Mike,
Just curious if you've looked at $SPX with EMA instead of SMA? It's interesting how they're telling two completely different stories right now.
Here's a chart:
http://chart.ly/vxyhma
I hadn't looked at that Bryan. Thanks
Is this a top?
This rally in the S&P, has been extending on declining volume which makes me wonder whether it has legs. I'm seeing plenty of bearish indicators.
In Tuesday's rally to 950 in the S&P, price peaked at a major fib level which also happens to be a significant prior inflection point in the historic price chart. It will be hard for price to pierce this level.
In the daily chart of the S&P 500, price pushed outside the bollinger bands on Tuesday signaling a "reversion to the mean" was probable. A pull-back did in fact occur on Wednesday.
The chart candles also appear to have formed a bearish "evening star", a reversal pattern. This coincides with what appears to be the fifth wave up in an elliot wave expansion.
Wednesdays retracement fell to 924 before bouncing late in the day off the prior fibonacci confluence zone, which now is providing support.
Today the market looks to open up. It will be interesting to see if the bulls have the legs to push price back up to retest the high, something I'd expect. If volume expands it would lend support to buyer optimism and further upside. Weak volume and a double top or failure to even reach that level, would indicate declining buying and be very bearish.