Market MATH
8-May-2024: Possible end of pullback?
Market Momentum Anticipation and Trend by Homma:
As technical traders, We
“Anticipate, but confirm. Wish, but only react.”
(Never forget)
Trend:
Uptrending in the Medium-term:
% of stocks above 50-day SMA is still making a higher low and is above 50%.
In the short term, we are down.
The reversal might be around the corner.
No confirmation yet.
Plot crossing its 5-DMA is a good confirmation.
See the fish hook structure appearing today and the plot pointing up.
Momentum:
The momentum has been decreasing for 5 days straight.
It has reached the April 19th level (the reversal day).
At this point, one can anticipate a possible reversal, but wait for the prices to confirm.
Key Indices Price action:
N500 has put a decent candle today at the channel midline.
On a 30-minute timeframe, it has broken out of the DTL and looks to be retesting it.
The breakout of the 20772 level will be the earliest sign of bounce.
Swing traders are not likely to have much success unless we breakout of this level.
A breakdown of the recent lows can see a further correction to the channel support.
Biggest positive:
The Net 4% movers data printed a positive number which tells you that buyers did step in today.
5-day MA is still in decline.
If we still print positive data tomorrow also, it would mean very positive for the markets.
Volumes: Not great
Although there was overall buying in the market, it was on very low volumes (see purple line).
A higher volume is a positive sign.
Summary:
Very early signs to start anticipating the bounce.
There is no confirmation as yet.
No problems for long-term and positional traders.
Swing traders should wait for some more confirmation.
That’s all for today.
See you soon
Homma