Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

'Black Candlesticks' a Concern for S&P 500 and Nasdaq

Published 26/05/2023, 05:11 pm
Updated 09/07/2023, 08:31 pm

A bright start for bulls on the back of positive NVIDIA Corporation (NASDAQ:NVDA) earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days.

The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap. 

Technicals are net bullish, and relative performance against the S&P 500 has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish,' today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here.

COMPQ Daily Chart

The S&P remains caught in a bit of a no-mans land after the 'bull trap.'  The index is once again inside the April-May trading range but above 4,050 support defined by February-March trading. Today's gain registered as accumulation, but not enough to reverse previous 'sell' triggers in the MACD and On-Balance-Volume.  The index is outperforming the Russell 2000 and is likely to continue to do so over the coming days.

SPX Daily Chart

The Russell 2000 (IWM) was a little clearer in its intentions, with a loss that dropped the index just below its 50-day MA. This added to the trouble in On-Balance-Volume, which has been switching back and forth for the last few months.  The damage isn't terminal, but a higher close is needed before we hit the long weekend.

IWM Daily Chart

For Friday, ideally, we want to see a positive finish to the end-of-week, one which neutralizes the bearish aspect of today's "black candlesticks" and the selling in the Russell 2000.  The S&P remains the leadership index, and there is a good chance we could have new all-time highs by the close of business tomorrow.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.