This is a weekly chart
Things do not look very good for the bulls. Index has dropped to where my purple actionary line is. That area coincides 1070 that has been an interesting level for a long time. Index is below the MAs that I use for the weekly frame and they seem to be rolling over. This is not a very bull-friendly picture. It can be corrected, of course. Bulls need to spend money and buy things . It’s that simple.
This is a daily chart
This OpEx week started positively but ended on a sour note. Volume on the up days was less that volume on the down days.
Index is below a host of MAs and shorter term MAs have rolled over. Bulls went limp when they could make a difference around 1100. Bears just gave up at support of 1070. Thus the Yo-Yo.
The daily chart has a negative posture and bulls need to get the index above 1085 to show some early signs of potential stabilization. They need a sustained move above 1090 to be taken seriously.
Daily breadth was poor.
You know market’s weak when it lingers in the oversold conditions or gets more oversold. Arms Index registered another high number, but is positively diverging
I noted that McClellan group of oscillators looked like they were forming higher lows
We may see an attempt at a bounce soon.
Broader measures of breadth look really weak
Overall, there is enough of a setup for a possible run up, but quite a bit more than just a bounce is needed to turn the breadth picture around
This is a 60-min chart
As I mentioned yesterday afternoon, there seems to be a complete 5-wave set from the peak of August 18. There are some divergences and we may see an attempt at a bounce early next week.
There are so many possible short term wave configurations that I’d rather just focus on my levels, MAs and price actions for now. I just would like to note that there seem to be enough waves for a complete correction and resumption of the uptrend. If you are a perma-bear, there is the possibility of a nasty 1-2-1-2-… on the away down – I’d really rather not get caught too deeply inside the waves right now.
Bulls need to get above 1090 to get back in the game. A move above 1080-1085 may give us a higher high for a possible short term uptrend.
Long term trend is up. Mid-term trend is up. Short term trend is down.
OEW pivot support at 10568 and 1041. Pivot resistance at 1090 and 1107.
In Before Market Open post of Aug 20, I said:
“If 1070 is lost, 1056 is our next OEW pivot, and I have some VWAPs around 1062 and 1059”
And where did the index halt its weekly decline? Not bad, eh? Not Bad!
Have a Nice Weekend!
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