Despite The Buying, Breakdowns Remain
2022.05.04 07:26
Last week closed with sellers in control. This pessimism was reflected in the buying of the last two days.
The NASDAQ had undercut March lows and had managed a day of accumulated buying on Monday, but Tuesday’s neutral doji marked doubts on behalf of buyers. Technicals are net bearish, but there is a slowly improving relative performance for the index which may be reflected in the NASDAQ over the coming days.
COMPQ Daily Chart
The S&P 500 was able to recover support (barely) yesterday, but I would hardly count it as a ‘bear trap’ yet. On a positive front, there was bullish ‘buy’ trigger in On-Balance-Volume. If this is a bottom—of sorts—then we need to see a confirmed move above 4,300, otherwise price action is just noise.
SPX Daily Chart
The Russell 2000 (via IWM) moved deeper beyond support, requiring a larger gain to return itself above support. The index is outperforming peer indices during the course of the April downleg, but it needs to do more to confirm a return above support and mark a ‘bear trap’.
IWM Daily Chart
I’m still looking at the measured move target lower as the preferred move here, although the last couple of days give buyers a chance to build a decent long trade. My protective stops for the monitored positions have not been hit yet, but buyers really need to step up far more than they have over the past couple of days.
