Friday, May 1, 2015

Stocks Go Chameleon

The Market Trend Model (http://bitly.com/M_Trend_Model) now shows a negative bias as the previous week's price move to new highs has reversed into a failed breakout.  The Nasdaq (http://scharts.co/1HAtavT) sliced through both trend line and horizontal price support on Thursday like a hot knife through butter. 

However, in typical liquidity driven fashion, the Nasdaq and other market indexes snapped back sharply on Friday to close just below key levels of resistance.  Friday's price action shows the Nasdaq, Nasdaq-100, and the S&P 500 are defending their respective 10-week moving averages ~ a critical level for the bulls to defend and a demarcation line for bears to press the market to lower levels.

And to make things interesting, the Russell 2000 (http://scharts.co/1Eesw83) failed in spectacular fashion to hold its 10-week moving average with last week's volume pouring in at over twice the previous week's volume.  It would seem that after leading the market for a short time, this index has returned to its prior 2014 character where it lagged the other market indexes for most of the year.

When all is said and done it certainly can not be ruled out that last week's failed break out could morph into a failed break down.  Always remain mindful that anything can happen in this bi-directional market, as has been proven by both bulls and bears time and time again.