Action Tightens At Resistance

Published 02/22/2019, 12:40 AM
Updated 07/09/2023, 06:31 AM
US500
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US2000
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IXIC
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SOX
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It's all getting very constricted and narrow at resistance but bears haven't been able to break this extended rally. While I have marked nascent potential short positions at such resistance they remain vulnerable to any decent one-day's gain. Ideally, I would like to see indices drift back to their 50-day MAs but nobody seems willing to blink.

SPX Daily Chart

The Nasdaq is hugging its 200-day MA but it's struggling to break through this moving average despite strength in the Semiconductor Index. One point of concern is the loss in relative strength versus the S&P 500.

COMPQ Daily Chart

The Philadelphia Semiconductor Index is running along channel resistance. It's one of the few indices to have cleared October-February price congestion with ease, but it hasn't yet been able to bring other indices with it. Today's bearish 'cloud cover' suggests further weakness ahead and a possible move back to channel support.

Philadelphia Semiconductor Index

Finally, the Russell 2000 is lingering around its 200-day MA but hasn't fully flashed a reversal pattern at this key moving average. It does enjoy a relative performance advantage over the Nasdaq, which suggests it remains favored as a target for money flow and therefore stands the best chance of breaking through.

Russell 2000

It appears everyone is expecting a sell-off after such an extended gain, but nobody seems willing to initiate it. At the same time, nobody wants to buy at these levels, so markets limp along higher

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