Day Hagan Tech Talk: Longer-Term Support and Near-Term Trend Change
A downloadable PDF copy of the Article: Day Hagan Tech Talk: Longer-Term Support and Near-Term Trend Change (pdf)
Summary
Prior to last week’s decline and as volatility picked up in both directions, domestic equity market indices had generally traded sideways for the better part of the past four to six weeks (hesitation). With last week’s sell-off, however, either uptrend lines were violated and not decisively recaptured and/or previous reaction low support levels were broken.
The Market Is Its Own Best Storyteller
The scenario in the above summary occurred before the weekend news about Iran and Israel. Yet, as Stan Berge once said, “The market is its own best storyteller and when it speaks, it pays to listen.” We should note the new short-term trend change (deeper pullback) and attempt to identify potential downside support levels.
Figure 1: S&P 500 (5123.41) with weekly momentum. | The long-term uptrend remains in place, and long-term support levels are shown below. Given the geopolitical news, weakening momentum (top frame), and uncertainty around how overnight futures are trading as of this writing, the following areas represent potential short-term support: 5104, 5056, and 4983 (gap support).
Note: How stocks close Monday, along with accompanying internal measuring tools, will be important, especially if there is some early indiscriminate selling.
Additional Support
NASDAQ (16,175.09): Vicinity of 16,000, followed by 15,600 to 15,450 and 15,150.
DJIA (37,983.24): 37,400-37,000.
Small Cap proxy (IWM/$198.69): $197.50, $195.89, $190+/-, $187.
Semiconductor Index (SOX/4745.05): 4683, 4620, 4566.
Please reach out for charts of any of the above.
Note: GLD (gold proxy) and SLV (silver proxy) experienced a serious high-volume reversal last Friday (4/12/24), from up to down. Whether there is any further downside follow-through (bearish) or not (stability would be good) will be a key guidepost.
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Art Huprich, CMT®
Chief Market Technician
Day Hagan Asset Management
—Written 4.13.2024. Chart source: Stockcharts.com unless otherwise noted.
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