Buy, Sell Or Hold?

Traders work on the floor of the New York Stock Exchange (Photo credit should read JOHANNES EISELE/AFP/Getty Images)GETTY

Monday's action set the tone for the whole week. In response to bullish hopes for a trade deal, the S&P 500 opened ten points higher and made a significant rebound high at 2816.88. The high was made in the first thirty minutes of trading, but by 12 PM Eastern time, the S&P 500 was down 25 points.

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The market tried to rebound Tuesday, but the sellers took over again on Wednesday. It was a rough week, with the Russell 2000 down 4.26%, and the Dow Jones Transportation Average down 3.3%. However, both are still showing a double-digit YTD gain.

That is also true for the Nasdaq 100, which held up better last week than the Dow Industrials or S&P 500. The selling increased as the week progressed, and the much weaker-than-expected jobs report on Friday was not reassuring for investors or traders.

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There were some significant changes in the daily technical outlook last week. The iShares Russell 2000 (IWM), which led the other market-tracking ETF's from the December lows, is already down 5.6% from the February 25th high. The daily starc- band has been tested for the last three days, which is a sign that IWM is oversold.

The former downtrend (line a) is now being tested with the next band of good support in the $147-148 area. There is first resistance at $154 and at the declining 20-day EMA. The daily Russell 2000 A/D line made a new high with prices in February but dropped below its WMA last Tuesday, March 5th(line c). The A/D line has already reached the start of next good support (line b).

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With Wednesday’s close, the daily advance/decline lines for the S&P 500, Nasdaq 100, and NYSE (Stocks-Only) also dropped below their WMA's. This turned my daily Viper A/D Trend analysis negative for the first time since January 4. By the end of the week, all of the A/D lines were below their WMA's.

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