Stocks started strong with a gap up on the open and finished strong with a close near their highs for the day. Overall volume was not that strong and Net Advancing Volume was mixed. NYSE Net Advancing Volume ($NYUD) finished at +877, while Nasdaq Net Advancing Volume ($NAUD) finished at +1377. The Nasdaq number was impressive enough, but the NYSE number below +1000 was not impressive and gives cause for concern. On the other hand, NYSE Net Advances ($NYAD) finished above +2000 and Nasdaq Net Advances ($NAAD) finished above +1000. In contrast, NYSE Net Advances were impressive, but Nasdaq Net Advances were not impressive. It is a strange situation with a rather split market, meaning we could be moving into a high level trading range for the next few months. Here are two chart links:
Nasdaq breadth and
NYSE breadth.
With Tuesday's strong advance, SPY surged above short-term resistance and closed near 110. The breakout is positive with the next target around 111. Broken support and the early February high mark resistance here. In addition, a 62% retracement of the January-February decline would extend to around 111. I am also marking a momentum resistance zone around 50-60 for RSI. This is based on the premise that a downtrend started with the plunge below 40 in mid January. Notice that the 40-50 zone acted as momentum support during the uptrend. Things could get very interesting if/when SPY and RSI hit their respective resistance zones.
On the 60-minute chart, SPY broke through the 108 barrier with a gap and follow through. The gap zone around 108 becomes the first support area to watch. A strong breakout should hold and a move back below 108 would show uncertainty. Overall, the pink trendlines capture the five day uptrend with support at 106. A break below this level would fully reverse this uptrend.
With Tuesday's strong advance, SPY surged above short-term resistance and closed near 110. The breakout is positive with the next target around 111. Broken support and the early February high mark resistance here. In addition, a 62% retracement of the January-February decline would extend to around 111. I am also marking a momentum resistance zone around 50-60 for RSI. This is based on the premise that a downtrend started with the plunge below 40 in mid January. Notice that the 40-50 zone acted as momentum support during the uptrend. Things could get very interesting if/when SPY and RSI hit their respective resistance zones.
On the 60-minute chart, SPY broke through the 108 barrier with a gap and follow through. The gap zone around 108 becomes the first support area to watch. A strong breakout should hold and a move back below 108 would show uncertainty. Overall, the pink trendlines capture the five day uptrend with support at 106. A break below this level would fully reverse this uptrend.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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