Some technical pieces have started to fall into place now to support a more sustainable rally developing.
While the longer-term Monthly Macro momentum indicators (the modified MACD & full Stochastic measures), are still trending downward with no visible signs of flattening out as yet, the more sensitive Williams %R has hooked fully back into maximum oversold territory and is in position for an upturn to develop at some point here.
While this may not be the most encouraging picture in and of itself, the Intermediate momentum measures are presenting a somewhat different view and may be signaling investors and traders to adopt a much more positive outlook, particularly with all the Daily momentum measures either in oversold territory or close to it.
The Intermediate momentum measures have not broken along with prices into new lows on the S&P, creating positive divergences currently on both the modified MACD and Stochastic measures, setting up a lower risk buy point on any developing upturn on these measures, provided the divergences remain in place. The more sensitive Williams %R measure is very deep in maximum oversold territory once again. The Daily Stochastic measure is close now to an upside cross here with the more sensitive Williams %R at absolute maximum oversold level. The Daily longer term MACD measure after starting to hook up is back trending lower with today’s action and has a bit of distance to recover before a positive crossover can occur. A positive upside cross on this longer indicator would add additional support for a more sustainable rally developing shortly.
The NASDAQ index is poised to lead out in the intermediate term, followed by the S&P and then the Dow. Why?
The Advance/Decline and Volume measures (including Oscillators, Summation indexes, etc.), have ALL failed to confirm the new price lows on Nasdaq, setting up more positive divergences provided they hold in place as well. The S&P and Dow have not, with the S&P in somewhat better position than the Dow on these measures. Having said that, the Dow could initially have a good move back up in the short run, due to its beaten down Advance/Decline and Volume measures but over the intermediate horizon could lag.
Risk on the S&P is currently down to the 200 Week Moving Average (MA) at approx. 3589.48 or just below there. The Monthly momentum measures are just entering the long-anticipated time zone for some bottoming action on them to start to develop.
Good trading,
Steve
While the longer-term Monthly Macro momentum indicators (the modified MACD & full Stochastic measures), are still trending downward with no visible signs of flattening out as yet, the more sensitive Williams %R has hooked fully back into maximum oversold territory and is in position for an upturn to develop at some point here.
While this may not be the most encouraging picture in and of itself, the Intermediate momentum measures are presenting a somewhat different view and may be signaling investors and traders to adopt a much more positive outlook, particularly with all the Daily momentum measures either in oversold territory or close to it.
The Intermediate momentum measures have not broken along with prices into new lows on the S&P, creating positive divergences currently on both the modified MACD and Stochastic measures, setting up a lower risk buy point on any developing upturn on these measures, provided the divergences remain in place. The more sensitive Williams %R measure is very deep in maximum oversold territory once again. The Daily Stochastic measure is close now to an upside cross here with the more sensitive Williams %R at absolute maximum oversold level. The Daily longer term MACD measure after starting to hook up is back trending lower with today’s action and has a bit of distance to recover before a positive crossover can occur. A positive upside cross on this longer indicator would add additional support for a more sustainable rally developing shortly.
The NASDAQ index is poised to lead out in the intermediate term, followed by the S&P and then the Dow. Why?
The Advance/Decline and Volume measures (including Oscillators, Summation indexes, etc.), have ALL failed to confirm the new price lows on Nasdaq, setting up more positive divergences provided they hold in place as well. The S&P and Dow have not, with the S&P in somewhat better position than the Dow on these measures. Having said that, the Dow could initially have a good move back up in the short run, due to its beaten down Advance/Decline and Volume measures but over the intermediate horizon could lag.
Risk on the S&P is currently down to the 200 Week Moving Average (MA) at approx. 3589.48 or just below there. The Monthly momentum measures are just entering the long-anticipated time zone for some bottoming action on them to start to develop.
Good trading,
Steve