Earnings season came and went but market did not get the push it was anticipating. So where does the market go from here? Let's see if charts are providing any clues... BPNYA is well below 70 mark and also below EMA(30) which suggests that it is better to remain on the sidelines or be cautious. However, Volatility ($VIX) has dropped to historical low levels suggesting complacency building up. NYSE weekly chart is providing a subtle clue which might be important and can be easily overlooked. Market remains near NEW HIGHs, however observe RSI and MACD slowly diverging. As long as RSI stays above 50 mark, market gets a benefit of doubt towards bullish side. NYUD has pulled back towards EMA(21) suggesting caution as RSI is also barely managing to remain above 50 mark. It seems like this market is setting up to catch many people on the wrong side. It shall not be a surprise if this market makes another marginal HIGH only to drop for a meaningful correction. Its better to be cautious in this environment as market is still trying to find next catalyst.
Market remains bullish but be cautious and alert... Comments are closed.
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