US Stocks: Not Great, But Not Bad Either
Declan Fallon | Jan 03, 2019 11:34PM ET
Apple (NASDAQ:AAPL)'s earnings disappointment had set the market up for turmoil, but again, markets were able to hold up against expected weakness. After December's fall into 'Strong Buy' territory, we now have a market immune to bad news which for investors means they can keep on buying.
I had looked to the Russell 2000 to be the next market leader and today's losses weren't enough to reverse a prior relative performance gain against the Nasdaq and S&P 500. Days like today are typically followed by a loss, which here is ultimately a retest of 1,266. Should this happen, traders can protect themselves with GTC buy orders set around 1,270.
The S&P maintained its MACD trigger 'buy' as it suffered a relative loss against the Russell 2000; as with the aforementioned index it favors a retest of the swing low at 2,346. The move to retest the low is supported by a 'sell' trigger in relative performance against Small Caps despite the 'buy' trigger in the MACD.
The Nasdaq is caught in the middle. There is a relative performance weakness against the Nasdaq but 'buy' triggers for the MACD and On-Balance-Volume. While not as weak as Large Caps there is still a preferred move to the swing low at 6,190.
For breadth metrics we have a deep oversold condition for the Nasdaq, deeper than lows of 2016 and not far off those of 2009.
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...and a surge in new lows, well beyond levels associated with the 2016 swing low.
For tomorrow, investors can keep buying and near-term buyers can start fishing for trades too.
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