Guy S. Ortmann, CMT | Mar 24, 2022 09:10AM ET
All the major equity indexes closed lower Wednesday with negative internals on the NYSE and NASDAQ as trading volumes declined on both exchanges from the previous session.
All closed at or near their lows of the day but left all the charts in uptrends with the only technical event of note was the DJI closing below its 50 DMA. The data moderated somewhat but left the McClellan 1-Day OB/OS Oscillators in overbought territory as did the detrended Rydex Ratio.
Thus, we continue to expect a continuation of some consolidation from the market’s recent sizable rally given the bulk of the data signals as well as several charts approaching high volume resistance levels that typically require several attacks before being overcome.
On the charts, all the major equity index charts closed lower yesterday with negative internals on lighter volume. All closed near their lows of the day but no support levels or trends were violated, leaving all in near-term uptrends. The only event of note was the DJI closing below its 50 DMA as the rest remained above.
We would note the DJI, COMPQX, NDX, DJT, and MID now have resistance levels consisting of rather high volume. Such high-volume resistance levels typically require several tests before being resolved to the upside. As such, they add to our expectations of some consolidation going forward.
The cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ remain positive while stochastic levels remain overbought but without generating bearish crossover signals thus far.
The data finds the McClellan 1-Day OB/OS oscillators overbought but less so (All Exchange: +66.17 NYSE: +56.27 NASDAQ: +73.69).
In conclusion, given the size of recent gains with nearly vertical near-term uptrends, as they approach high volume resistance combined with the data, continue to suggest to us the markets are likely to go through a period of consolidation of said gains before further progress may be made.
SPX: 4,397/4,530 DJI: 34,081/34,830
COMPQX: 13,700/14,147 NDX: 14,126/14,749
DJT: 15,745/16,585 MID: 2,642/2,717
RTY: 2,015/2,090 VALUA: 9,426/9,647
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