Please try another search
For the moment the downward trend stays intact as the market and media embrace more negative news.
News of a housing market top, increasing inflation, geopolitical stress, and more add a dampener to investor sentiment. However, when everyone becomes bearish and is calling for more decay, it could be a sign that selling is becoming temporarily exhausted.
Additionally, while the Small-cap index Russell 2000 (NYSE:IWM) ended Tuesday in the red, it has not broken last week’s low of $171.79.
Having said that, here are two contrary signals the market is giving towards the upside, or at least for holding its current price area.
In the past, we have talked about using high yield corporate debt (JNK) as a risk on or off indicator.
Recently JNK saved us from loading up on equities in the rally attempt when the market moved higher while JNK stayed behind. Now, JNK could save us from becoming too bearish as it closed well over its 10-DMA at $94.93.
If buyers continue to show support for JNK over the 10-DMA, anyone who is looking for another break lower might want to heed some caution.
A lower amount of average daily volume since Monday in IWM is also worth noting. If liquidity dries up it becomes easier to move the price as it takes less buying or selling.
On top of that, if selling becomes weak, it won’t take much buying for the market to pop.
This doesn’t mean that the economic outlook is about to improve, but it does shed light on the potential for the stock market to jump from oversold territory.
With that said, bottom searching in a downward trending market can be a great way to lose money. Therefore, watch for JNK to stay over its 10-DMA as a confirmation it’s improving in strength.
S&P 500 (SPY) 397 pivotal. 380 minor support.
Russell 2000 (IWM) 168 support.183 resistance.
NASDAQ (QQQ) 285 minor support.
KRE (Regional Banks) 62.17 to clear.
SMH (Semiconductors) 215 support. 239 resistance.
IYT (Transportation) 223 needs to hold.
IBB (Biotechnology) 116.68. to clear and hold. 112.60 to hold.
XRT (Retail) Currently, the weakest member of the Modern Family.
USO (Oil) Doji day. Watch for a breakout over 83.60.
DBA (Agriculture) Closed over the 50-DMA at 22.14
Altria shares are down close to 11% since the start of 2022 Stock currently generates a lucrative dividend yield of 8.5% Buy-and-hold investors could consider buying Altria stock...
Home Depot faces uncertain earnings outlook But it has strong cash flow and consistent dividend yield Share price weakness offers buying opportunity as fundamentals remain...
Wednesday was a quiet session for the S&P 500 as the index finished almost exactly where it started. That was a welcome relief following Tuesday’s massive bearish reversal. Does...
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.