Guy S. Ortmann, CMT | Dec 02, 2021 09:23AM ET
The major equity indexes closed notably lower again Wednesday after giving up sizeable gains form early in the session. All closed at or near their intraday lows on heavy volume as selling pressure continued. Internals were negative on the NYSE and NASDAQ. So, all the index charts are now in near-term downtrends. However, the data is telling a very different story, in our opinion.
The McClellan 1-day OB/OS Oscillators and % of SPX stocks trading above their 50 DMAs are at levels seen at market correction lows over the past 2 years while insiders continue to increase their buying activity as the crowd rushes for the exit. So, although the markets continue to slide, we are of the opinion that, in retrospect, it will eventually be viewed as a buying opportunity. We remain “neutral/positive” in our near-term macro-outlook for equities.
On the charts, the major equity indexes closed lower yesterday with very negative internals on the NYSE and NASDAQ as volume remained heavy. All closed at or near their lows of the day after giving up nice gains earlier in the day.
However, in our opinion, the data is sending a notably different message.
In conclusion, we believe the current state of the markets will be viewed in retrospect as a buying opportunity at some point in the not-too-distant future. We remain near-term “neutral/positive” in our macro-outlook for equities.
SPX: 4,473/4,588 DJI: 33,856/35,006 COMPQX: 15,019/15,4720 NDX: 15,643/16,134
DJT: 14,924/15,492 MID: 2,621/2,776 RTY: 2,130/2,250 VALUA: 9,204/9,703
RTY chart courtesy of Bloomberg; all other charts courtesy of Worden
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