Good day! The market finally broke a six-week losing streak for the Dow Jones Industrial Average ($DJI) and S&P 500 ($SPX) last week, but the victory was in name only and the gains were measly. The one sure thing was that it was clear that investors weren't at all sure exactly what stance to take for the week. June has been plagued by a sharp selloff to continue the reversal that began at the start of May, but this selloff left the indices feeling exhausted heading into the week. The result was a great deal of overlap in price action from one day to the next throughout the week as anticipated with the bears continuing to push prices towards the 200-day moving averages. The leadership in the selloff has been in the Nasdaq with particular weakness in technology shares.
We've yet to see decent reversal strategies begin to form on the daily charts despite the slowing pace of the selloff, so my outlook for this week remains similar to last: I'll continue to focus on the smaller, intraday charts for trade setups, while continuing to watch for reversal strategies to begin to develop. These will most likely be in the form of Momentum ReversalsTM or Reverse Head & Shoulders on the 120 minute charts.
For the most part, the intraday bias has remained in the bears' favor, but we are seeing a shift heading into Monday morning to suggest some relief to that pressure in morning trade. Nevertheless, the 60-minute charts are still favoring slower overall corrections on the upside, which keeps pressure on the bulls and favors daytrade action versus multi-day follow-through.
Dow Jones Industrial Average