Equity markets had a decent week with the Russell starting out on a nice move higher into the $125 resistance area. NASDAQ moving slightly higher into the previous daily high, and the S&P making new all time highs. The two sided market conditions have not gone anywhere. Everyday my stock list was half red and half green (watch list as well) and that's not the same market conditions that buyers used to create for the huge moves higher. It tells me that even with the bull moves we made this week, the market is still trading in the same conditions we have been for 6 months now. And in these conditions, you can't just ignore the fact that all we've done is made a move higher into resistance levels in the NASDAQ and on the Russell.
Buyers ended the week on a good note, closing weekly hammer candles near the highs. During the week buyers did a much better job of holding and triggering stocks, which was a nice change up from the choppy markets we have been in all year. The Russell 2000 gave a clear level ($123.25-$123.50) for buyers to get above and hold higher highs and lows to reverse the intraday trend, so far they have been successful. That will be important next week to watch for continuation. The NASDAQ isn't as black and white as the Russell but $110 is still the level I'll be watching for buyers to get through. S&P and Dow Jones need an intraday trend to hold into all time highs. If we don't get any follow through or just fail altogether there is nothing to trade since sellers have nothing set up.
Once again NASDAQ had a pretty erratic week moving lower against a daily uptrend with no real trend in the swing points, finishing the week with a large gap up. We are still in a two sided choppy market. These aren't conditions I'm trying to be very active in, but with that said I am staying prepared and on the watch for something to happen either long or short. The Dow Jones was in a position where sellers had a real shot at forming an intraday trend below break even, but they were too weak to make it happen and the gap up on Friday completely negated that potential situation. Next week I'll be watching the gap low support to see if bulls want to do something with that and maybe help get the rest of the market in shape.
NASDAQ failed to hold the gap low/$110 and that told me this wasn't a typical breakout as most of the time in recent history buyers would've held the relevant support with ease and continued. Price moving lower from there wasn't something I was interested in trading as we still had intraday and daily uptrends, so this entire week ended up being one of sitting back doing nothing as far as new positions were concerned in equities. Buyers still have a daily trend to work with in the NASDAQ while the Russell is coming back into $120/YTD break even support area. So far buyers are stepping in protecting these areas, and the weekly charts are still looking good.
The NASDAQ had a great week after reclaiming the intraday trends and making new highs. I wanted to share this chart that goes through the simple analysis I was doing during this week -- NASDAQ 65m chart. In my opinion it's a great learning opportunity for intraday trend analysis. Looking back we can see that gap down from Friday (4/17) was erased Monday (4/20) and Tuesday (4/21) as price attempted to reclaim the 65m trend with an equal high. At that point I considered that lower low from Friday (4/17) to be a shakeout and buyers needed a higher low to work with along the rising 65m trend to regain control. That is what we saw before the large move higher (4/22). To keep this in context, all of this was happening above YTD break even, above daily support areas, and with a rising 50 day average. To take it one step further, in a weekly bull market. While this was happening there were some great looking long setups to trade and that's what I was doing all week. All of this was tweeted out while it was happening.