Confirmation Of October Lows Continues
Declan Fallon | Nov 19, 2018 12:10AM ET
Thursday began the confirmation of October swing lows with bullish piercing patterns and Friday kept this momentum running—even if there is still lots of work to do.
The S&P closed at Thursday's highs and kept away from the latter's lows. Volume was a little lacking but technicals, aside from the MACD, are bearish. Monday's edge favors bulls.
The NASDAQ retained its positive test with a second 'buying' opportunity. Look for a push higher and above the 20-day MA. As with the S&P there is a MACD trigger 'buy' but other technicals are bearish.
The longer-term chart has moved into the 'Primary Loss' phase; this phase could last over a year until the desired swing low emerges. Market Breadth has tagged oversold conditions but the Percentage of NASDAQ stocks above the 200-day MA hasn't dropped into the sub-20% zone which has featured in every last major swing low.
Likewise, this chart also shows how the Percentage of NASDAQ stocks above the 200-day MA offers an investor buying opportunity.
The Russell 2000 was another index finishing near Thursday's high. Again, look for upside follow-through on Monday.
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For today, look for a continued follow-through of Thursday's buying. Longs just need to be cautious of a reversal of Friday's gains as further losses towards a loss of Thursday's lows would then be favored—raising stops to a loss of Friday's lows would protect against this.
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