Stock Markets Analysis and Opinion

Bull Flags For NASDAQ And S&P 500

2022.06.09 07:35

The last few days have seen the S&P 500 and NASDAQ consolidate their bounce with ‘bull flags’. Both markets are coiling in preparation for a follow through move—presumably higher. 

In the case of the NASDAQ,  we have ‘buy’ triggers in the MACD, On-Balance-Volume and +DI/-DI – although stochastics are struggling to cross the mid-line. The index is outperforming the S&P which should favor a move higher and a challenge of the 50-day MA. 

Bull Flags For NASDAQ And S&P 500COMPQ Daily Chart

The S&P is in a similar predicament as the NASDAQ. Its ‘bull flag’ is getting ready to break declining resistance but is backed by ‘buy’ triggers in the MACD and On-Balance-Volume. Note, once it does break through it will run into the resistance of its 50-day MA.

Bull Flags For NASDAQ And S&P 500SPX Daily Chart

The Russell 2000 (via IWM) is not shaping a ‘bull flag’ and is up against declining resistance.  It did manage to negate the bearishness of Monday’s ‘black’ candlestick, but Wednesday’s inside day would also be considered a bearish reversal.  Look for a loss today but the 20-day MA is there to help should this be the case. 

Bull Flags For NASDAQ And S&P 500IWM Daily Chart

The last few days have seen a back and forth in the development of the consolidation for both the S&P and NASDAQ, and as things stand, neither bull nor bear has the edge.  However, we have to consider recent action, and while the longer term action is a decline, the move off the lows looks like it will be the next dominant move. I will be looking for an upside breakout. 

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