Markets Start the Year on the Same Note as 2022 Ended - What Levels to Watch
Declan Fallon | Jan 05, 2023 02:42PM ET
The new year is well underway - and the market - well, it hasn't done a whole lot since I last left it. People stopped believing in Santa, and market action remains slushy into the new year.
The S&P 500 is holding the support level defined back in the early October swing high. Volume has picked up on the slow return of traders as On-Balance-Volume continues to trend downwards. We have a switch back to the underperformance against the Russell 2000. Optimists might look to the upcoming MACD trigger 'buy.' At this stage, given the length of the consolidation and its compactness, it looks like one that will break lower.
The Russell 2000 consolidation has morphed into one comparable to the one in the S&P 500.
The one big difference is the new MACD trigger 'buy', plus it has the attraction of being the peer market leader.
The longer these consolidations last, the more likely they will break southwards. Having said that, there is a good chance for the Dow Jones Industrial Average or the Russell 2000 to lead out and bring the Nasdaq and S&P with them; but should either of the latter two indices crack lower, then it will be a long winter.
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