Guy S. Ortmann, CMT | Mar 10, 2022 08:56AM ET
The major equity indexes closed notably higher yesterday with strong market internals but lighter trading volumes for the NYSE and NASDAQ. All closed near their highs of the day with one index violating resistance as two others closed above their near-term downtrend lines. Nonetheless, the majority of the charts remain in near-term downtrends as does cumulative market breadth. Yet there was enough strength to cause us to raise several near-term support levels on the index charts.
The data remains mostly neutral except for the extremely high levels of bearish sentiment. Yesterday’s action, in our opinion, was an example of such extreme sentiment resulting in powerful moves on only slightly positive news. So, while we are encouraged by yesterday’s results, we believe further index chart and cumulative breadth improvements are needed to imply we have moved out of the current highly volatile trading ranges.
On the charts, all the major equity indexes close nicely higher yesterday with positive internals on both the NYSE and NASDAQ as buying interest stayed strong throughout the session. Positive technical chart events were seen on the DJT and RTY that closed above their near-term downtrend lines and are now neutral. Also, the VALUA closed above resistance. As a broad and unweighted index, the VALUA move can be view as encouragement for the general market, in our opinion.
As well, several resistance levels were tested but failed to be violated. All remain in near term downtrends except the DJT and RTY that are now neutral. Cumulative market breadth remains negative on the All Exchange, NYSE and NASDAQ. No stochastic signals were generated.
The data continues to send generally neutral signals except for investor sentiment that remains near historic levels of bearish expectations.
In conclusion, yesterday’s positive action still needs further improvement to imply a sustainable rally.
SPX: 4,168/4,286 DJI: 32,620/33.291 COMPQX: 12,790/13,557 NDX: 13,226/13,766
DJT: 14,711/15,220 MID: 2,527/2,598 RTY: 1,940/2,010 VALUA: 9,004/9,256
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