subtle clues to detect if a change in trend is coming ...

Today was relatively quiet with slow, boring price movements (which I like to see).  With that said, the movement was generally bearish in nature.  We opened up nicely and more or less spent the rest of the day falling.  We did hold nicely above the low from yesterday, but the lack of volume on the upside shows little bullish conviction.  It is understandable that investors are cautious to enter the market, but if the bulls don't take the ball quickly ... the bears will, and we can expect another down leg.

As I mentioned yesterday, I was hopeful we would get a bounce today and move up to test the 50 day moving average, but today's action gives me little confidence in this scenario.  Bulls need to act tomorrow.

SPY 30 minute chart - showing moving average resistance and volume flaws

For today's technical analysis 'lesson', I pulled up the 30 minute SPY chart to try and get a gauge of the market in the short term.

short term bottom put in? - end of day comment

The Nasdaq all in all had a mildly successful day, but failed to hold above the previous low, which was an important level.  Although it has been obvious that we have been in a downtrend for a few weeks now, we officially have a lower high and lower low as of today.

This action notches a slightly bearish hue to today's positive action (see the intraday comment below for more details)

Daily Nasdaq notating higher highs (HH) / higher lows (HL), along with lower highs (LH) and lower lows (LL)

Because of this lower low in the chart, the battle between bears and bulls certainly isnt over and leans me to more toward a short term bearish move.  I expect to move up to the 50 day moving average (blue line above), but with the new lower low today, we might see more lows before this revisit occurs.

Volume was lower today than yesterday which is positive, but not really a definitive signal considering the above price action.

More clues will appear tomorrow in the tape ... until then, have a wonderful evening.

short term bottom put in? - intraday comment

Although I would be surprised if we don't have more downside over the next month, it looks like we might have put in a short term bottom.




Yesterday, the nasdaq putting in a new low intraday, just barely undercutting the previous low from early March (noted by the red horizontal line above), but closing near the high of the day on strong volume.  This is a bullish reversal.  we tested the low and rejected it ... buyers came back in strongly at that level.

We also 'closed' above the previous low set in late April ... therefore (barely) keeping the trend up.  Remember the definition of an uptrend is 'higher highs and higher lows' .. so although we are incredibly close to breaking the uptrend ... we (temporarily) avoided a new lower low (based on closing values).

Today's action SO FAR is very encouraging in that we again opened and dropped to test yet again the previous low, and once again the buyers stepped in.  This sends a strong signal to the players out there that going up is a more likely short term scenario.

The next test will be the closing action today ... to see if strong buying comes in OR the opposite.  Changes in the market behavior do not occur in one day, but rather over a series of events that slowly convince the trading public which way the market wants to go.  With each passing positive event, the public will become more bullish and start putting money to work again ... and of course ... the opposite is true as well.

Although the market looks poised for a rise over the next few days, I am still largely bearish (in the short term) and until we see some extremely positive action, will continue to sit on the sidelines cautiously optimistic.  I expect us to be able to rise to the 50day moving average (notated with the blue line above) over the coming week, and then experience another dip from there.  The outcome of this rise and retest will send a strong message to me as to which way the market wants to go.  Each passing day provides more clues as to the market's movement.

back in action ...

Many of you have encouraged my daily (and intraday) analysis and I appreciate your continued 'push' and words of encouragement.  I have taken some time away from the blog, just got busy with my own endeavors,  but with that said, I hope to get back into writing on a daily basis.

Feel free to send me comments and questions - your feedback is very helpful!