Guy S. Ortmann, CMT | Nov 29, 2022 09:16AM ET
All the major equity indexes closed lower Monday with negative internals on the NYSE and Nasdaq as trading volumes rose from the prior session.
All closed at or near their intraday lows. Only one technical event occurred as one index turned neutral from positive, with the rest still bullish as all support levels held. The McClellan 1-day OB/OS Oscillators that were suggesting some potential weakness at the open proved prescient and are now back at neutral levels, as is the bulk of the data. However, the % of SPX issues trading above their 50 DMAs and valuation remains cautionary.
As such, while we are of the opinion that stocks that pulled back yesterday near support while remaining in uptrends can be bought, it is too early to presume said consolidation is complete.
On the charts, all the major equity indexes closed lower yesterday with negative NYSE and Nasdaq internals on higher volume.
The McClellan OB/OS Oscillators that were waving a yellow flag at the open have returned to neutral; easing is a prior cautionary signal (All Exchange: +9.72 NYSE: +24.0 Nasdaq: +0.87).
In conclusion, while yesterday’s correction tempered the cautionary OB/OS signals that now suggest buying issues near support can commence, given the current valuation and the % 50 data, it would be premature to assume a period of some further consolidation has been completed. We remain buyers on weakness.
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