Guy S. Ortmann, CMT | Jan 14, 2022 09:13AM ET
The major equity indexes closed mostly lower Thursday except for the Dow Jones Industrial Average, which posted a slight gain. Market internals were negative on the NYSE and NASDAQ as trading volumes increased from the previous session as all the indexes closed near their intraday lows. While four of the indexes closed below their near-term support levels, none of the current near-term trends were altered from their current neutral patterns. Meanwhile, the data remains generally neutral as insiders did a bit of buying yesterday while the typically wrong leveraged ETF traders remain skeptical of the notable rally earlier in the week. As such, we remain near-term “positive” in our macro-equity outlook as the charts are suggesting we may be seeing a test of Monday’s “hammer” levels that, when they occurred, we noted they had a possibility of being tested. Said tests appear to be occurring presently.
The data finds the McClellan 1-Day OB/OS Oscillators still neutral (All Exchange: -7.59 NYSE: +18.22 NASDAQ: -26.87).
In conclusion, we believe yesterday’s weakness may likely be a test of Monday’s “hammer” washout of sellers. Such tests are far from unusual. So, given the state of the charts and data, we remain near-term “positive” in our macro-outlook for equities as we remain of the opinion that Monday’s action likely placed a near-term bottom for the indexes.
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