Consolidation brings consternation

February 27, 2018 02:31 PM

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U.S. equities

And on the U.S. equities, we merely present the chart where the moving averages and overall trend progression speak of an Evolutionary trend view where the traumatic downside spam of early February has been fully digested and left the market still bullish overall. In the first instance the full 24-5 daily chart including the overnight CME Globex trading as well as the Regular Trading Hours (RTH) pit trading quotes is interesting. It shows that the early February selloff intially into Tuesday the 6th and culminating in a retest on Friday the 9th was a vicious double-bottom that held.

We have discussed why that Friday’s holding success was very likely in our Friday, February 16th It’s 1998, not 1987 post referencing the previous Wednesday’s (i.e. prior to the Friday retest) emailed Rohr-Blog subscriber note. We refer you back to that for the detailed insights on the disorderly Monday night RTH trading’s implications.

That post also discusses the March S&P 500 future overrunning the higher 2,660 weekly channel down Break (see our two-year front month S&P 500 weekly chart from that Feb. 16 post) that it Closed into on Tuesday the 13th during its Wednesday, Feb. 14 recovery from early pressure below that area. That was due to the stronger-than-expected U.S. CPI data.

The recovery from lower levels and push higher that day was both an impressive technical indication and a key psychological factor on something we had been anticipating for quite some time: further orderly interest rate increases were not going to reverse the overall U.S. equities uptrend.

It is also of note now that the March S&P 500 future has not even been able to react fully back down to the 2,660 Negated channel DOWN Break (holding around 2,700 instead), and is up into the higher failed support and Oscillator resistance in the 2,760-70 range from back into the beginning of the February 5-6 plunge.

The other higher failed support areas included violated support into the 2,820-30 range, next lower mid-January congestion in the 2,809 area (now correlated again with current heavier weekly Oscillator resistance), and the Negated daily DOWN Closing Price Reversal (CPR) in the 2,788.75-2,790 range. All are now higher resistances. 

And while the tendency for the other global equities to lag behind the U.S. remains, they are also obviously being encouraged by the renewed strength in the United States.

 

Rohr International’s active analysis of how short-term activity fits in with the intermediate- and long-term trend indications is another MODERN TRADER advantage.

Rohr International Risk Disclaimer: This analysis is intended solely for educational purposes. Investing and trading involves considerable risk, and losses can be substantial. Rohr International is not responsible for, and assumes neither any specific nor general liability of any business actions, market transactions, or decisions based on information published, suggested, or recommended in this analysis. See more here.

 

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About the Author

Alan Rohrbach is Lead Analyst and President of Rohr International, Inc.  He is an international equity index, interest rate and foreign exchange trend advisor. His forte is ‘macro-technical’ analysis of how fundamental influences blend with technical aspects to drive trend psychology. Clients include international banks, hedge funds, other portfolio managers and individual traders.