Guy S. Ortmann, CMT | Feb 11, 2022 10:15AM ET
h2 McClellan 1-Day OB/OS Oscillators Moderate/h2
All the major equity indexes closed lower Thursday with negative internals on the NYSE and NASDAQ as trading volumes rose from those from the prior positive session. All closed at or near their lows of the day. As we had suspected, given the state of the charts and data, the indexes were rejected from their high-volume resistance levels we thought would pose a near-term barrier to progress. Importantly, in our opinion, no violations of support or trend were violated, leaving the majority in near-term sideways trends with one staying positive. Cumulative market breadth remained mostly positive as well. Meanwhile, the data has returned to a generally neutral signal as two of three McClellan 1-Day OB/OS Oscillators dropped to neutral from their prior overbought conditions. As such, we suspect the markets will remain in a trading range for a while as it works off the high-volume resistance before resuming strength.
On the charts, all the indexes closed lower yesterday with negative internals on heavy volume as all closed at or near their lows of the day.
The data finds the McClellan 1-Day OB/OS slipping back to neutral from overbought except for the NASDAQ now mildly overbought (All Exchange: +33.83 NYSE: +4.46 NASDAQ: +54.21).
In conclusion, yesterday’s weakness was not unexpected and, in our view, suggests some sideways action for the near-term given the state of the charts and data.
SPX: 4,435/4,587
DJI: 35,009/36,128
COMPQX: 13,961/14,524
NDX: 14,469/15,208
DJT: 15,270/15,757
MID: 2,628/2,740 RTY: 1,990/2,140
VALUA: 9,385/9,657
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