The broader markets made an incredible run higher from the sharp selling three weeks ago. Market internals turned bearish several days ago and prices are extended from support. However, the broader markets and most stocks defy the odds of a normal retracement and have been moving sideways. An extended market can work off being overheated by moving sideways, but market internals aren’t close to saying think long. Let’s review what’s happening and some lines in the sand.
Today as another narrow range inside day (traded inside the prior day’s range). Odds suggest a pullback, but price are holding at highs. That is bullish, but buying – even a move new highs historically doesn’t work.
The 30-min. chart above clearly shows the copy sideways price action over the last 4-days. The lines in the sand have been drawn.
The Russell 2000 ETF symbol IWM has shown a bit more weakness, but it too defy the odds. Keep an eye on it for a heads up for other market’s direction.
Goldman Sachs (GS) reported its earnings and after early morning wild price action down, up and back to the low of day prices continued lower. Then like most it went sideways the rest of the day. Today’s topping tail just under the 200-ma strongly suggest a move lower into the unfilled gap below.
I recommended APPLE (AAPL) on my Twitter and Stocktwits pages almost two-weeks ago. At this point, the odds are that the move up will stall and may pullback. We’ll keep an eye on it as the weekly time frame still suggests it can move higher. For now let’s see how it handles this overhead resistance.
A lot more earnings to be reported tomorrow. We’ll see how they may move the markets in the morning. I will be posting the futures overnight and pre-market moves before the open at Twitter and StockTwits
All the best,
Greg Capra
Founder of The Pristine Method of Trading
Follow me on Twitter and StockTwits to get real-time updates:
Twitter: @GregCapra
Stocktwits: @Greg_Capra
