Confirmation Of October Lows Continues

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Thursday began the confirmation of October swing lows with bullish piercing patterns and Friday kept this momentum running—even if there is still lots of work to do.

The S&P closed at Thursday’s highs and kept away from the latter’s lows. Volume was a little lacking but technicals, aside from the MACD, are bearish. Monday’s edge favors bulls.

Confirmation Of October Lows Continues

SPX Daily Chart

The NASDAQ retained its positive test with a second ‘buying’ opportunity. Look for a push higher and above the 20-day MA. As with the S&P there is a MACD trigger ‘buy’ but other technicals are bearish.

Confirmation Of October Lows Continues

COMPQ Daily Chart

The longer-term chart has moved into the ‘Primary Loss’ phase; this phase could last over a year until the desired swing low emerges. Market Breadth has tagged oversold conditions but the Percentage of NASDAQ stocks above the 200-day MA hasn’t dropped into the sub-20% zone which has featured in every last major swing low.

Confirmation Of October Lows Continues

COMPQ Daily Chart

Likewise, this chart also shows how the Percentage of NASDAQ stocks above the 200-day MA offers an investor buying opportunity.

Confirmation Of October Lows Continues

COMPQ Monthly Chart

The Russell 2000 was another index finishing near Thursday’s high. Again, look for upside follow-through on Monday.

Confirmation Of October Lows Continues

RUT Daily Chart

For today, look for a continued follow-through of Thursday’s buying. Longs just need to be cautious of a reversal of Friday’s gains as further losses towards a loss of Thursday’s lows would then be favored—raising stops to a loss of Friday’s lows would protect against this.

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