📈 Bullish or Bearish?

We had a volatile week... now what?

State of the Market

After a volatile week featuring an ugly Friday, traders went into the weekend questioning whether the market is due for a correction or if the uptrend is still intact.

Was Friday one day of selling or day one of selling? Here’s my take on the indexes.

Nasdaq

The first thing to note is that we have had a negative RSI divergence for some time now.

You can see below that as the Nasdaq is increasing, the RSI is not doing the same. This is a signal that the magnitude of the move is weakening and we may be due for a pullback.

Another trendline that I have been keeping an eye on is the one below that began in 2000.

We are sitting right on top of the trendline right now but have not had a confirmation bar signaling a break of that trend. Does this mean we are rejecting? Not necessarily. We just don’t know yet.

Risk On vs. Off

The risk on/off indicator below shows that we have reached a common peak and are now starting to reject.

Historically when we reach these levels you can see that we are accompanied by a sell-off in the market.

This is something I would keep an eye on.

This weekend’s video dives deeper into the indexes with a specific focus on key names to watch that will help you understand which direction the market is moving in: