Guy S. Ortmann, CMT | Oct 29, 2020 10:49AM ET
The major equity indexes closed notably lower Wednesday with broadly negative internals on the NYSE and NASDAQ as trading volumes swelled from the prior session. All closed at or near their intraday lows with all the charts breaking below their near-term support levels. All are now in near-term downtrends and below their 50 DMAs.
However, the data and valuation metrics are becoming more encouraging, suggesting the possibility that we may be nearing a near-term bottom. Yet, until we start to see encouraging signals on the charts and market breadth, we are maintaining our near-term “neutral/negative” outlook for the equity markets.
On the charts, all the indexes closed lower yesterday with very negative internals on heavy trading volume.
On the positive side, the data actually improved.
In conclusion, the recent carnage in the markets may be setting up a buying opportunity as the data and valuation have become more encouraging. However, we are maintaining our near-term “neutral/negative” outlook until we see a shift in sentiment and potential bottoming signals on the charts.
SPX: HVS3,250/HVR3,360
DJI: 26,290//27,557
COMPQX: HVS10,939/11,489
NDX: 11,077//11,495
RTY: 15948/1,590 VALUA: 6,265/6,5510
/h2
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