Guy S. Ortmann, CMT | Dec 14, 2021 09:48AM ET
All the major equity indexes closed lower Monday with negative internals on the NYSE and NASDAQ as trading volumes rose from Friday’s session. Some of the charts violated support and are now in near-term bearish trends. However, we would note that all made higher lows versus those made in the first week of December. While it does not suggest a bottom is eminent, the higher lows are somewhat encouraging from a technical perspective.
Yet, the chart trends are now a mix of positive, negative and neutral implications. The data finds one of the OB/OS Oscillators back in oversold while contrarian crowd sentiment finds them primarily on the bearish side of the fence. As a contrarian indicator, it is viewed as a positive for the markets. So, although no confirmations of relief of recent pressure are apparent, the combination of higher lows as the crowd becomes more frightened suggest we keep our near-term “neutral/positive” macro-outlook for equities in place.
On the charts, all the major equity indexes closed lower yesterday with negative internals on the NYSE and NASDAQ as trading volumes rose on both. All closed at or near their intraday lows.
Looking at the data, the McClellan 1-Day OB/OS Oscillators find the NASDAQ now oversold with the All Exchange and NYSE neutral (All Exchange: -48.8 NYSE: -41.03 NASDAQ: -54.1).
In conclusion, selling pressure continued in the markets yesterday with no important evidence present that the correction is complete. Yet, while breadth and the charts have weakened, the indexes made higher lows versus the lows of the first week of the month while investor sentiment finds the crowd starting to run for cover. Thus, we remain near-term “neutral/positive” in our macro-outlook for equities.
SPX: 4,633/NA DJI: 35,319/36,159 COMPQX: 15,376/15,631 NDX: 15,888/16,417
DJT: 15,480/16,540 MID: 2,740/2,812 RTY: 2,155/2,220 VALUA: 9,542/9,930
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