Market Internals and Direction
We’ve noted the improving market internals during intraday trade for a number of days now. So has the rest of the market no doubt – question is, are there more buyers lurking out there ready to support a further advance or is it time for a pause?
COMPX – Nasdaq has been underperforming, but performing. Its likely that technology will be harder hit by sellers given its relative performance to the less tech-heavy NYSE:
NYA – The NYSE has been on a tear, now having retraced more than 50% of the recent decline. The 50% level is where we’d expect any decline to first head to, prior resistance (marked near the 7125 level) will be next.
Targets Hit
Looking at the big-picture intraday chart we can see price butting up against overhead resistance here.
Trading Plan
When price hits a significant target we can expect it to pause, or potentially reverse.
What one does here is a matter of personal perspective and trading time horizon. Short term players will be locking in at least some profits here while the longer term swing trader is more likely to hold with break even stops on new positions.
On the broad S&P 500 index price has a significant distance it can retrace yet still remain in a new uptrend in larger time frames – so there’s little choice here but to decide which camp one is in and act accordingly.
In the meantime, any healthy retracement will mark the next significant opportunity to position new longs, assuming the new strength in the market internals continues to hold up.
05.02.03 09:34 #