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S&P 500 Breakout Confirmed But Technicals Continue To Lag

ByDeclan Fallon
Published 04/10/2020, 12:11 AM

Yesterday, the S&P did a good job reversing Wednesday's bearish cloud cover, clawing back all losses and remaining above breakout support. Technicals aren't all there yet; the ADX (+DI/-DI) joined the MACD on a 'buy' trigger, while Stochastics and OBV remained bearish.

SPX Daily


The NASDAQ similarly defended the breakout but did so with a bullish trigger for +DI/-DI and the MACD. Even ROC returned to positive territory. Where things are looking a little sketchy is the relative loss against the S&P.

COMPQ Daily

The Russell 2000 (via iShares Russell 2000 ETF (NYSE:IWM)) isn't there yet, but it did enjoy an On-Balance-Volume 'buy' trigger alongside that of the MACD.

IWM Daily


The Semiconductor Index is in an interesting position as it becomes the first of the lead indices to test its 200-day MA. Yesterday's action was good, but there remains much work to do. It does enjoy good technical strength with stochastics on the verge of a bullish cross.

SOX Daily


The question now for bulls is if they can hang on to this bounce. Certainly, the breakout stock monitor has been very disappointing in so far as it has delivered few—and often, if any—breakouts. We will see what the coming week brings.

Latest comments

It crashed head on the 50% fib with a gaping doji. Having third leg up so steep, don't think this island will hold.
S N P 500 Futures...Fed knocking out the shorts so will go higher to take them out then pull back.
16M unemployed in the US alone, and you want us to believe that nothing happened and let's make a new high? At least there should be some common sense prevailing. I know FED doesn't believe any difference between Casino and Stock Market, but in actuality, there is a difference. New lows coming. Most businesses in the world are losing money and the stock market going UP?
19x pe at 2,780 is not priced in when corporate earnings expexted to fall over 25% this year. In 2007 it was 12x. So do the maths, 2,789 is simply not sustainable
he is short and getting burned
 priced when SPY=2800? don't think so.
There is never such a thing as overbought or oversold. I've always believed that and I think it applies now more than ever
technicals are useless in today situation. markets are overbought on hopes while news get worse and worse. prepare for a retest of last month lows.
Fed wont allow it, dont bet agaisnt them
Are you a predictor or from Fed.
Best to stick with cyclic analysis for now and the coming months.
incrementally add to short positions as the s&p goes up. it will be coming back... soon
I am waiting now then average down and go long afterwards
Jeff, 100% agree.. A no brainer. Paitence pays.
Look ahead not the past and you will also see the light at the end of the tunnel, like they say in football "go long".
Would not get long here
Any reasons after the breakout of not going long? It's seems solid sessions to suggest long. Thanks
extend lockout period, low GPD, high unemployment rate, coronavirus storm, delayed mortgage payment up 1,900%. Really reluctant to expect any rise in market.
Breakout will last until June. How will go index? Now they are bullish as last June. Really incredible indeed!
Declan Fallon always gives one of the best, no non-sense analysis and he has been right most of the time. My personal take is this relief rally will challenge SPX 3100-3150 level and fizzle down even harder than before.  The severity will be even more this time as Fed / other CBs would have already used most of their ammo by then. Only science/nature can help recover against this virus, but Corona Virus is only the catalyst; the underlying problem is hugely accumulated debt, for which there is no cure but a financial system reset (which comes painfully).  So, watch out folks; and preserve your wealth for now than trying to profit from it! I hope I am proven wrong and humanity does not suffer further, but this is a fear I must share!  Good luck all!
Dear Solomon, what you wrote is fully in line with what was written in a recent projection by  Harry Dent, who, too, has been right in most cases. It looks like a likely scenario.
this was written on 9 Apr; ES 3150+ part came true. Let's see if this melts down in next few weeks
Throwing $$$ at it doesn’t remove fundamentals!
https://www.marketwatch.com/story/the-federal-reserves-stimulus-may-be-aimed-at-the-economy-but-stock-investors-will-get-many-of-the-benefits-2020-04-09
Classic Secondary reaction after a first bearish segment in a bearish market, 2 or B wave before the next bearish wave 3 or C. Nothing more.
it is defined as wave b if we are in the corrective state. it could be a scenario that we are not in corrective state too. that requires distribution and follow thru to determine which state we are at.
This coming Monday will not be as pretty as last week anymore. TA wise we should see a retesting of 2700 again
it also depends on how opec goes. thrusday's volatile action is mainly due to opec drama (affect oil price), Mexico still objects unfortunately and meeting will carry on over the weekend.
 Mexico has agreed.
current bull trend has no fundamental, its purely driven by Fed. as long as they keep pumping $$ no technical will matter. everything will go up . Starbucks SBUX classic example. Revenue loss by 50%, estimate miss by 21%, 2020 guidance retracted still its going up, this is free money. the crash will come 2021 post elections.
technical analysis can tell the past not the future. therefore it is useless.
Ahhhh to be young again... you sound so naive.
 Funky. Agree, Justin does not know how to use technical analysis.  Technical analysis on 3x leverage helped me to gain 5 digit return in 2 weeks. therefore it is useful.
Pure technical analysis under these economic circumstances is done by monkeys, for monkeys. How are you about to just talk about your chart doodles when our central bank is printing trillions out of thin air and piling it on top of record debts and deficits in a frozen economy? You're a doosh just for using this platform to influence simpletons
"premise of an underlying active economy" . what a load of garbage. this is not Twitter. inform yourselves before writing here
 Technical analysis/TA on 3x etf helped me to gain 5 digit return in 2 weeks. Most people just don't know how to use TA, it is NOT just above overbought and oversold. lol
"about" not "above"  oh yea, and you need to understand how wave, distribution and follow thru work too besides TA. follow that principle can guide u the success.
dead cat bounce
HiCan you please give indications as to weather you think the nasdaq is going to be bullish or bearish over next week
I agree
This coming week will be correction week. Monday will see biggest selloff
fed would never allow that, they”ll pump until no tmrw
May be it all looks good on daily chart but have a look at weekly chart and it seems to be a strong bearish trend nearing fib retraction zone and considering crisis of current time it just looks to be a pull back a deeper correction could start sooner than latter
technical are bad school orchestra at the moment
Lots of commentators concur that there seems to be a lack of fundamental reasons for the rally to continue. If S&P500 2856 is reached, then new all time highs are likely (although that scenario is unlikely). More than likely 2856 will not be exceeded and the market will correct further. That's how I see it, but Im using about 15 indicators less than this guy
U r say techincally, problem is market now up becos of fed. Not because current situation. What up = down if not support by foundamental. There will be months of every country lock down atleast. India and indon pending to be cases explode. Wirhout vacine, surely There no due date for this. God bless all.
the US isn't recovering within three weeks, So many states waited on starting stay at home - not to mention things like spring break and mardi gras - certain area's are about to explode and all that aid is going to do zip - when you don't have a cohesive national plan your going to get, the fragmented recovery the US is going to experience! The first 5 states that enforced locking down will start seeing the curve flatten over the next week to two but there are still going to be enough secondary cases roaming around that a very slow get back to work will have to be enacted - the plans are going to need to coincide with active testing and follow-up similar to what is happening in Taiwan, Singapore etc or those states will be right back into the soup! Trump and his band of merry men can't change that dynamic, they set this up to happen! trumps failing to take national, federal action is going to hamper all their happy little plans of a quick return to normalcy!
Yes, in my country Malaysia. when there are 15 cases on a district. It will claim as a red zone. Currently, we already MCO (monitoring control movement) lock down which to be extend to a month. If we gonna have a Zero cases, still, we need to isolate our border to any outsider quarantine for 14days. IMAGINE this to implement to every country. Not to mention US was in a chaos now.
What does this mean? Every person says the technicals arent making sense. Can someone please make sense of it? Or is the fed just pumping money into a collapsing market causing a ticking time bomb of a collapse?
means its players bankers 50 win 50 lose. even 3 years old can pen the chart cos its basically zero direction.
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