Monday welcomed the week with a tone of happiness but any joyful feeling was wiped off the market on Tuesday with weakness in mega-cap stocks based on continued concerns of economic slowdown and possibly growth in earnings for this year.
The chart below shows the hesitant and non-directional day for the S&P 500 and Nasdaq Composite, although the Dow Jones Industrial Average did manage to close the session
Monday’s momentum managed to lift the market up and while it is offering a glimmer of hope for the turnaround, it is still too early to say any momentum to the upside can be sustained. So we should continue to assume the market is bearish until there is more evidence it is not.
There was broad-based interest in the bullish move yesterday with many stocks getting n on
Thursday was another choppy session that had risk sentiment surrounding it with a slightly heavier than average volume. However, unlike the day before, a few sectors saw some strength.
With the re-opening, many retailers have not managed to cope well in earnings and many have issued disappointing guidance. It seems the good news from this round of earnings s that it is coming towards the end.
Wednesday was an important day for our assessment which had a heavy sell-off session. Price for the main markets are still between a resistance and support level but certainly very much bearish.
Each of the major indices dropped at least 3.5% amid the inflation concerns. All sectors ended the day in the red and did most stocks.
We are still mainly standing aside holding cash and watching but
While we are not trading this market, we are certainly watching it. The premarket for Tuesday was bullish and while intraday we saw some weakness on the 1-minute chart below, we did close positive for the session.
All sectors bathed with the bulls except for Consumer Staples which closed -0.69%.
The S&P has resistance at 4.114.65 and Nasdaq at 12555.35. A break above these levels and we could
Right now we are standing aside and waiting for the market to show its hand.
We have already reduced our portfolio size since November in anticipation of a drawdown in this market. Should price action turn into a full-blown bear market, we are ready to enter shorts if necessary.
As you can see from the S&P chart below, it was another swinging trading session saw a volatile day end slightly positive for the Nasdaq, almost flat for the S&P and negative for the Dow Jones.
Once again, not a market we want to be involved in and we should continue to stand aside while enjoying this volatility.