Spike Low Achieved But Indices Still Need To Confirm A Bottom
Declan Fallon | May 24, 2022 12:36AM ET
Friday's spike lows helped mark an anchor point for a trade-worthy reversal. Monday's action maintained the sanctity of the spike low as markets failed to close below the prior low, while also managing to finish the day higher. We still have to get beyond the range of what is now looking like a 2-week(+) base, but in an oversold market this is a good place to be.
The NASDAQ is on the verge of a new MACD trigger 'buy' as other indicators remained net bearish. Confirmation of a bottom will come on a break above 12,000.
The S&P logged a gain following its spike low as it too sits on the verge of a new MACD trigger 'buy'. Similarly, On-Balance-Volume is near a new 'buy' trigger too. It needs a close above 4,090 to confirm a bottom.
The Russell 2000 (via IWM) had managed a spike low Friday, but it did so from a greater position of strength than for the S&P and NASDAQ. The index also has a MACD 'buy' trigger to go with the improving trading condition—although the MACD 'buy' is starting from well below the bullish zero line.
Markets are shaping new base ranges with good support around the lows. We now want to see pressure on base range highs, and then breakouts to confirm a bottom for the broader market. Still plenty of work to do.
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