The Nasdaq charts have some very nice technical patterns for evaluation.
As we speak, I’m working by means of numerous seems for the Nasdaq in both the QQQ or $NDX. The explanation to make use of QQQ is that it’s an ETF that may be traded and has different items of data just like the SCTR, which is simply obtainable on tradeable ticker symbols. These charts are displaying numerous views, and I will bounce between the totally different timelines and shows.
To begin with, the quarterly chart is an enormous long-term view of the Nasdaq 100. That is the bottom RSI since 2012. It would not look very lengthy on the chart, however 10 years is a very long time.
One factor to observe on this chart is that the purple RSI uptrend would not break. I do assume that the dimensions of the transfer down for the primary two quarters are suggesting that, this time, it is totally different. The opposite factor to note is the massive rollover on the PPO momentum indicator.
Transferring to the month-to-month chart, we’re testing the 40-month transferring common. This has been a superb long-term pattern indicator. I do assume that, if we break far more, the issue would be the confluence of occasions that occurs. Firms have a sure inventory value as a part of their debt and, when costs fall beneath that, they begin to impair firms’ capability to carry debt.
One wonderful factor to note is how the amount modified after COVID. 2022 has seen much more quantity.
Transferring to weekly, the knowledge will get extra illustrative. We now have been caught underneath the 10-week transferring common, however we’re testing it this week. On the amount chart, we are able to see much more quantity this 12 months. It additionally reveals what number of constructive weeks we have had in 2022. 🥴
The black line is on the 2020 pre-COVID excessive. For Could and June, the Nasdaq is performing consistent with the $SPX. That may be seen on the purple relative power space chart. The PPO wanting prefer it needs to show up provides us a bit confidence. Nevertheless, when you’ve got been placing trades on right here, it has been terribly uneven.
Going to the every day, I’ve bought a few totally different views. The primary is a view again to the tip of 2020. We’re presently 7.5% beneath the closing value of 2020. The topping construction of November / December 2021 actually broke down rapidly to begin 2022. January to March was extraordinarily uneven, and that last March excessive was vital. I’ll say that the rally off the June lows has not been very easy, so it nonetheless seems to be a bear flag.
The primary goal of Fibonacci could be meaningfully larger, however that appears out of attain proper now.
Once I transfer over to QQQ, I’ve another charts. I will use the SCTR indicator, which compares the power of this ETF to different ETF’s. Sometimes, this lives within the high 50% of the ETF universe, however it’s nonetheless weak. I’ve drawn a wider head/shoulders high, nevertheless it could possibly be drawn with the left facet at Sept/ October 2021 as nicely. Both approach, it’s a topping formation. For those who use the 320 stage because the neckline, then the H/S goal is 220, the place the black line is.
Final week I discussed the QQQ:IWN ratio as a great indicator of when development names ought to begin to speed up. Thus far, the chart (center panel) stalled at this vital junction.
Lastly, let me wrap it up with a PNF chart of the QQQ. The bearish value goal on the QQQ is 229, which is near the H/S goal.
It is a very weak market! We now have much more data obtainable at OspreyStrategic.org for these of you who’re all for weekly market updates. This isn’t to overwhelm you, however to maintain you in tune with what’s going on. It’s lower than $17/week, and we even have a trial program.
Keep tuned; it needs to be a unstable third quarter!
Greg Schnell, CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities evaluation. He’s additionally the co-author of Inventory Charts For Dummies (Wiley, 2018). Primarily based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He’s an lively member of each the CMT Affiliation and the Worldwide Federation of Technical Analysts (IFTA).