After Friday’s close I would have expected some form of bounce – either today or yesterday – but this didn’t happen. On the (somewhat) plus side, there was no undercut of support of June lows for our monitored indices, although the Dow Jones Industrial Average did undercut such support last Friday and it didn’t get much better day with another standard bearish candlestick today.The S&P is next on the loser list and it’s only hanging on to June support. Given action in the Dow Jones Industrial Average and bearish technicals it’s hardly looking likely that we will get a bounce here, but bulls can live in hope.The Nasdaq continues to make inroads in relative performance against its peers, but overall technicals remain problematic (and bearish). It … [Read More...]

It was a day when markets closed below their open, but above yesterday’s close; this set-up is typically bearish and shows as a black candlestick in a chart. The problem is that buyers have been building a nice edge since the big bullish engulfing patterns from last week. The expectation for tomorrow is a day of selling – so if this doesn’t happen then bulls can look to the rest of the week with optimism.The Russell 2000 is the index to watch. In addition to today’s gain it also managed a break from the declining channel on higher volume accumulation. Technicals have shifted more in favor of bulls with ‘buy’ signals in the MACD, On-Balance-Volume and the ADX with sharp gains in relative performance to … [Read More...]

Markets gain, but they are hardly convinving. The Russell 2000 ($IWM) is the best example as it posts its fourth day of doji/spinning top candlesticks – which post a net gain – but do so from a point of indecision.Technicals for the Russell 2000 are still net positive, but I’m expecting a big red candlestick anytime soon. Note the falling buying volume, another reason to lack confidence in the current advance. The Nasdaq is bearish in technicals and has run up against resistance of the swing low in June. The spinning top at this resistance is not a vote of confidence in what is normally considered a ‘neutral’ candlestick. On the positive front, one could argue the bounce has come from a second successful bounce of declining resistance – turned … [Read More...]