Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Looking For A Weaker Finish By The End Of The Week

Published 11/06/2022, 11:30 PM
Updated 07/09/2023, 06:31 AM

Indices had a confusing day of trading on Friday. In traditional candlestick terms the S&P 500, Nasdaq and Russell 2000 all finished with either bullish 'dragonfly' doji or bullish hammer. The problem is that all of these candlestick appeared off a gap higher from the open instead of a gap lower. The net effect of this is that we are effectively left with a more neutral finish to the week than could have otherwise have been the case.

While the Nasdaq's finish fits with a bullish 'hammer' it also (sort of) engulfed Thursday's trading with its spike low. Technicals remain net bearish and relative performance to the S&P is in the dog house. The one positive is the continued defence of former channel resistance - turned support. 

COMPQ Daily Chart

The S&P had not engulfed Thursdays' trading as had the Nasdaq, but it did have the benefit of leaning on declining resistance connecting August and September swing highs, although it would have been helpful if it had also managed to regain 50-day MA support - something it wasn't able to do. While the Nasdaq is net negative for all technicals, the MACD of the S&P is clinging on to an earlier October 'buy' signal, and had managed to cross the bullish zero line. However, a positive day today would make a big difference.

SPX Daily Chart

The Russell 2000 didn't undercut Thursday's low on Friday's trading (unlike the S&P and the Nasdaq), but in doing so, it's holding on to support of its 20-day and 50-day MAs.  Unlike peer indices, it also holds net bullish technicals. While I wouldn't consider Friday's action bullish, it's the index most likely to post gains in the coming week. 

IWM Daily Chart

For this week, if Friday's trading is to be considered bullish we will not want to see Friday's lows violated (on a closing basis). Where things get be more difficult is when you look at the weekly charts for indices, which look to be more bearish. For example, this Nasdaq weekly chart has a confirmed bearish finish on distribution level volume. With that in mind, why we may see a positive start today, by the time Friday rolls in things may be looking at lot weaker.

COMPQ Weekly Chart

Latest comments

With a clear mind, as always. 👍
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.