Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Silver Lining?

By Declan FallonStock MarketsSep 02, 2022 03:25AM ET
www.investing.com/analysis/silver-lining-200629298
Silver Lining?
By Declan Fallon   |  Sep 02, 2022 03:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
US500
+3.09%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US2000
+2.72%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IXIC
+4.41%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

If there was a setup for a bullish reversal in the indices then yesterday was the day. The Russell 2000, Nasdaq and S&P all closed with bullish reversal candlesticks down at the 61.8% Fib retracement of the move from June through August. However, any further loss would open the possibility for a complete retracement to the June low.

The Russell 2000 finished yesterday with a doji on higher volume distribution. Stochastics finished just below the mid-line, resulting in a net bearish technical picture - but these same stochastics are at a level where rallies in bull phases occur (the Russell 2000 having jumped to the bullish side of this equation in July).

IWM Daily Chart
IWM Daily Chart

Yesterday's selling on Nasdaq did not register as distribution, but technicals are weaker than for the Russell 2000, somewhat cancelling each other out.

COMPQ Daily Chart
COMPQ Daily Chart

The S&P also finished with a bullish 'hammer' and actually managed a higher close (no accumulation volume though). Technicals are still net bearish, but there was a rapid uptick in Large Cap relative strength performance over Small Caps.

SPX Daily Chart
SPX Daily Chart

Given the surge in S&P relative performance strength, prospective buyers would be better to track this index for long opportunities than for the Nasdaq or Russell 2000. Watch for a gap higher today and/or bullish strength beyond the first half-hour of trading. Stops go on a loss of yesterday's lows. Should selling continue, any retracement that goes below 76% is likely to go all the way to June lows - although it's hard seeing bulls getting as good a setup as yesterday's should yesterday's lows be breached.

Most of the trades were taken up in May (a little early), but the July-August rally was an excellent opportunity to sell options against these positions.

Summary Sep 1
Summary Sep 1

Silver Lining?
 

Related Articles

Silver Lining?

Add a Comment

Comment Guidelines

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.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

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.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email