Well, this was one of the few weeks this year where the $COMPX and QQQQ finished in positive territory, but the Nasdaq composite finished just below the key 2000 barrier. Tthere was selling early in the week as anticipated, but it did not last long and we did not make it down to $35.65. Instead, the low for the week was put in on Monday, and ended up being $36.03.
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I suppose this might have been the result of a favorable drop in oil, together with some positive economic reports, the lack of much in the way of traditional earnings warnings/downward guidance, and some decent (not great) early earnings reports. However, the upper resistance zone slightly above $37 defined by the declining 50 sma was pretty much reached, and as expected, turned QQQQ back. Bearishness seems to be increasing, since further declines in oil late in the week didn't have any positive effect on the market. Volumes were rather low, but increased as QQQQ rallied towards resistance. This also is a bearish signal, IMHO (resistive volume).
I see nothing in the volume patterns that raises hopes for a rally next week, and instead there is evidence for a continuation of the downside we saw in today's session.
How long into the week this might last will at least partly depend upon earnings, which accelerates now, and economic reports. I think the market will temporarily at least not be influenced by oil prices, which will probably stabilize here near the lower BB rail. The market only seems to get interested when oil begins to approach another record high, and that is a ways away now.
Short-term market internals give a bit of a mixed picture. The $TICKQ suggests initial upside early in the week, but the NYSE TICK does not. But the volatilities strongly indicate upside, meaning downward pressure in prices.
So... bottom line, I think we might see a little bit of upside early in Monday's session, but collectively the indicators pretty much agree that we are headed for substantially more downside after any early rally (which I don't think can last long).
...all IMHO, of course.
T |
