Guy S. Ortmann, CMT | Jan 28, 2022 11:19AM ET
The major equity indexes closed lower Thursday, with negative internals on the NYSE and NASDAQ as trading volumes dropped from the prior session. Most closed near their intraday lows, with several violating support levels. However, one ray of hope may come from the fact that the vast majority made higher intraday lows versus Monday’s deep selloff lows. While the charts and market breadth have yet to send a glimmer that the worst might be over, in our opinion, the data is suggesting that fear is at peak levels and pressure has built to levels that have historically been coincident with notable rallies as discussed below. Thus, we remain expectant of some strength returning to the markets at some point in the near term. Chart confirmation will be required, however.
On the charts, all the major equity indexes closed lower yesterday with negative internals on lighter volume on the NYSE and NASDAQ.
We continue to believe the data is sending strong signals that a notable rally may be forthcoming as said data increases in pressure.
In conclusion, while the charts and breadth remain awful, the data continues to build up pressure for a notable upside reversal, in our opinion.
SPX: 4,290/4,437
DJI: 34,013/35,072
COMPQX: 13,281/13,923
NDX: 13,990/14,503
DJT: 14,659/15,608
MID: 2,516/2,647
RTY: 1,669/2,140
VALUA: 8,927/9,326
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