Guy S. Ortmann, CMT | Jan 11, 2022 09:33AM ET
The major equity indexes closed mostly lower Monday with negative internals on the NYSE and NASDAQ on heavy trading volume with 3 of the index charts closing blow their near-term support levels. However, there were multiple “hammer” candlestick chart patterns created that imply the recent notable market 5-session correction may have been completed as the bulk of the charts closed near their intraday highs after recovering from significant intraday lows. These “hammer” formations, in our experience, have a high probability denoting a washout of sellers at the end of a steep downtrend as has been recently experienced. So, while the data has yet to turn green, remaining largely neutral, we are shifting our near-term macro-outlook for equities to “positive” from “neutral/positive” with the understanding that yesterday’s lows could be retested at some point.
On the charts, the indexes closed mostly lower yesterday on heavy volume except for the COMPQX (page 3) and NDX (page 3) that managed to post gains.
The data finds the McClellan 1-Day OB/OS Oscillators still neutral (All Exchange: -21.24 NYSE: -6.45 NASDAQ: -32.61).
In conclusion, while the data continues to send a generally neutral forecast and cumulative market breadth remains poor, the significant shift of demand overtaking supply yesterday after a steep decline as seen by the hammer formations, suggests we shift to a “positive” near-term macro-outlook for equities.
SPX: 4,654/4,718
DJI: 35,922/36,300
COMPQX: 14,877/15,087
NDX: 15,561/15,902
DJT: 15,836/16,363
MID: 2,777/2,866
RTY: 2,160/2,190
VALUA: 9,715/9,824
/h2
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.