This week started off where Friday left off as selling hit the tape through Wednesday with the Russel taking the brunt of it and breaking the pivot low established on 07/12. Given the Russell's importance, being the first to break the sequence of higher lows and lower highs suggested that the rally was breaking down, however this didn't stick for more than a couple of days and as of today the Russell reclaimed that pivot with a strong 2.43% move.
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| $RUT |
Although the Russell cracked this pivot briefly, the NASDAQ did not and the 07/12 pivot low has now held for 11 days. In addition, the volume on the positive days has been higher on average than the volume on the negative days.
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| $COMP |
Additionally further strength has been shown in the SPX which held its pivot and closed today with a new lower high.
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| $SPX |
On the indexes there has been continued strength evident by the sequence of higher lows and lower highs which is positive. Unfortunately this has not been achieved in a linear manner as of yet and there continues to be volatility and choppiness as the right side of the range is being carved out. With 3-5 up days followed by 3-5 down days with multiple gaps and range bars of 1-2% being the norm, as of now it has been difficult to choose a side –long or short, due to the whiplash nature. There also continues to be a mix of influence upon the market whether it be news from Europe, current weather conditions in the US and the effects of drought, as well as individual stock catalyst through this earnings season. This being said, the action over the past two days furthers the bullish case as the market continues to shrug off bad news and bad earnings.
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