Oil prices surge to two-week winning streak as Iran supply fears grip markets
There was more wild fanfare on Thursday than any real damage to indices despite Microsoft’s (NASDAQ:MSFT) earnings hit.
We will start with the Nasdaq. I have redrawn the breakout as an adjusted ’bullish ascending triangle’ rather than a ’bull trap’. A loss of ascending triangle support would bring into play a future test of the 200-day MA, which I think the index needs, but is not guaranteed. Technicals have seen a ’sell’ trigger in +DI/-DI, but other technicals are holding up well. It could get ugly if Apple disappoints; if that happens, then the 22.2K level is the immediate concern.
I’m not sure what to make of the S&P 500. It’s a bit of a mixed bag. I have redrawn it as a skittish bullish ascending triangle, but it may just be a broader rising channel. The 50-day MA is looking like it will be key support on the next test. A loss will open up for a test of the 200-day MA.
The Russell 2000 (IWM) successfully tested its 20-day MA and is holding to its breakout. It’s looking technically vulnerable with a ’sell’ trigger in the MACD, but it’s also outperforming peer indices, which will help it attract investment.
Bitcoin took a spin for the worse with a solid red candlestick that undercut $85K support. The loss came off the back of a distribution day. Of technicals, only On-Balance-Volume is on a ’buy’ trigger. The undercut of support confirms the ’bull trap’, and likely means worse to come. November’s spike low will offer some form of support, but if volume stays the way it is, I wouldn’t expect it to hold out for long.
If Tech earnings continue to disappoint, then we will start to get the overbought reset tech stocks need. It’s not great news for workers in the tech sector who continue to see layoffs, but it will provide the foundation for the next cycle of the rally.