Guy S. Ortmann, CMT | Feb 09, 2022 09:20AM ET
The major equity indexes closed higher Tuesday with positive internals on the NYSE and NASDAQ as trading volumes rose on both exchanges from the prior session. All closed near their highs of the day. Yet, there were no violations of resistance, or their near-term neutral trends, as was also the case with the market’s cumulative breadth.
And while the NASDAQ 1-Day McClellan OB/OS Oscillator has become overbought, the historically high level of the crowd’s bearish sentiment, as noted yesterday, suggests the tests of high-volume resistance levels on the indexes remains likely. Should that transpire, we would then expect a period of sideways movement before said resistance levels may be violated.
On the charts, all the indexes closed higher yesterday with positive NYSE and NASDAQ internals as trading volumes rose on both. All closed near their highs of the day. Yet, the strength was insufficient in terms of violating resistance levels or near-term trends. As such, all the indexes remain in near-term neutral trends. Strong market breadth left the cumulative breadth for the All Exchange, NYSE and NASDAQ neutral and below their 50 DMAs. No stochastic signals were generated.
The data finds the McClellan 1-Day OB/OS Oscillators for the NADAQ entering overbought territory as the others remain neutral (All Exchange: +36.14 NYSE: +6.64 NASDAQ: +57.11).
In conclusion, recent market strength has failed to trigger any notable warning signals on the data while the crowd is about as fearful as it has been in the past 20 years. As such, we suspect tests of high-volume resistance on the index charts remains likely.
SPX: 4,435/4,587 DJI: 34,743/35,658 COMPQX: 13,918/14,524 NDX: 14,469/15,208
DJT: 15,080/15,511 MID: 2,603/2,699 RTY: 1,990/2,140 VALUA: 9,294/9,523
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