THE BOTTOM LINE:
After a 50% retracement in the strong Nas 100 Index, I looked at it as a 'gift' of saying, hey we got cheap again or at least less expensive!
All else is contained in my individual index commentaries and in a Trader's Corner article coming out tomorrow (Sunday, 3/22).
The S&P 500 Volatility Index (VIX):
A suggest trade in VIX calls worked on a short-term basis but if held are back to near or below purchase value. VIX, as it's name should forever tell us is VOLATILE.
The Index has dipped back to into what has been typically a 'support' in VIX at 12-13. I'm a buyer of VIX calls near and at 12 and a seller at 16-17.
The VIX DAILY chart:
MAJOR STOCK INDEX TECHNICAL COMMENTARIES
S&P 500 (SPX) DAILY CHART:
The S&P 500 is bullish in its pattern and given the strong rebound momentum here should carry SPX to new highs for the current move. 2120 is assumed resistance but with a sustained move above 2120, we could see SPX advance to a next resistance at 2150-2160.
Support is highlighted at 2080, then at 2060. Anything near 2080 looks like a buy and 2150-2160 a sell.
SPX saw a strong rally after a number of lows forming in the same area over a 3-day period. In a 'normal' correction in a bull market, a 50% retracement and three days of the buying interest in the same area suggest a potential upside reversal and a favorable risk to reward on a bullish strategy.
Related bullish turnaround signs were seen with the oversold RSI reading and build up of bearishness as seen at the points of the green up arrows on those two technical indicators.
S&P 100 (OEX) INDEX; DAILY CHART
The S&P 100 (OEX) is bullish in its pattern after the strong recovery rally after OEX retraced between 50 and not quite 60 percent of its prior advance. Needed for the intermediate trend being up is for OEX to trade now at or mostly above its 21-day moving average. Stay tuned.
Resistance is in the area of the prior highs of course, in the 930-932 area. Next major resistance then comes in around 945.
Near support is 910, extending to 900, which should offer fairly major support at this juncture.
THE DOW 30 INDUSTRIAL AVERAGE (INDU); DAILY CHART:
The Dow 30 (INDU) Average has regained its bullish near-term trend but is overall mixed. Bullish events included the reversal at the 50 percent retracement level and the strong follow through buying that carried the Dow quick to back above 18000.
Bearish uncertainty is in what happens at the prior high, another dip or, if pierced, the potential start of a further up leg.
It appears that the prior highs will be exceeded given the thrust to this close. 18000 should offer support on pullbacks. Next pivotal support comes in at 17800.
Technical resistance is suggested at the prior Dow intraday highs in the 18245-18288 zone. Assuming a decisive upside penetration above 18288-18300, a next advance could carry to the 18500 area which would begin fairly major resistance.
NASDAQ COMPOSITE (COMP) INDEX; DAILY CHART:
The Nasdaq Composite (COMP) is bullish in its pattern as the Index decisively pierced pivotal chart resistance at 5000. Prior to that, an initial bullish stance was called for in the Composite given the strong rebound after a 'minimal' 38% fibonacci retracement of COMP's prior advance. A strong uptrend in a stock or an index often won't see a corrective pullback come along that is MORE than a third or so (38%) of its prior advance.
Related influences for a trend reversal included a type of 'oversold' condition shown by my 'CPRATIO' indicator seen below; the dip into bullish territory is seeing a dip in that line caused by a pick up in put volumes. When bearishness leans to far in this long-term bull market, it's a good 'contrary' indicator! Easy to forget in panic attacks of where we are; i.e., in a long-term bull market. 'It's a bull market dummy' could be my morning mantra.
COMP support can be looked for in the area of the 21-day moving average currently at 4950; next lower support at 4900 is pivotal support. Closes below 4900, certainly below 4850 would be bearish on an intermediate term basis.
Resistance is highlighted at 5050, with next projected resistance starting at 5080, with an 'easy' uphill slide to 5100. I don't see higher near-term but longer-term chart resistance shows up around 5175-5200 currently.
NASDAQ 100 (NDX); DAILY CHART:
The big cap Nas 100 (NDX) strongly reversed to the upside after retracing a half of its prior run up. I thought NDX 'cheap' at that point, at a 50 percent retracement. If I can buy more stock at the midpoint of the last up leg, that's a good price generally in a strong long-term trend like the one the US Market is in.
After its a sharp rebound from the 4300 area, NDX next leaped above key resistance at the prior 4400 'breakdown' point and seemed about to lunge to the prior top. Perhaps irrational exuberance at play 'created' an upside chart gap without corresponding follow through yet. Not surprising to see a consolidation here. Pullbacks to the 4400 area look to be a buy, rallies to near 4550 a sell.
Support is highlighted at 4400, with next lower support, 4350.
Technical resistance is first assumed at the prior 4484 NDX intraday high, extending to 4500. Pivotal next resistance at 4550 looks to be a 'stretch' for the Index to get to near-term as it looks like some backing and filling are coming up but mostly above 4400.
The NASDAQ 100 TRACKING STOCK (QQQ); DAILY CHART:
QQQ rebounded strongly once the stock retraced half its prior advance. In a bull trend, generally buying pullbacks of about half to a bit more are good business trading wise.
The sharp turn to the upside quickly put QQQ back above its 21-day moving average, highlighting the shift to upside momentum again. Support is seen in the 108 area, with next chart support at 107, extending to 106. Buying pullbacks to the 108 area is suggested by the chart. Bullish, but a little ahead of itself, witness the fall off Friday on profit taking.
Key QQQ resistance is at the prior high in the 109 area. Above 109-109.4, a pivotal next resistance is projected at 111.
A bullish On Balance Volume line (strongly up) concur with the strong advance that the Nasdaq big cap index was in when it blasted above 108 resistance.
RUSSELL 2000 (RUT); DAILY CHART:
The Russell 2000 (RUT) I noted last week (3/14) "put in a possible 'island bottom' with the gaps lower, then higher, leaving that the two isolated days you can see that have lows near 1200." YES, a strong advance has followed after said bottom and RUT's rebound carried further/faster beyond even my bullish expectations. Last week I was projecting resistance at 1260, now surpassed.
RUT's strong advance above its prior high and then to above 1260 resistance suggests a next target to the 1275 area; fairly major resistance/selling interest expected next to be found at 1295-1300.
Support is highlighted at 1240 near the 21-day moving average; pivotal next lower support is anticipated around 1220. Buy in this area if you can.
GOOD TRADING SUCCESS!