The market finished the week with a rally on Friday. Now the question is… bulls or bears? In the video above, we’ll create a scorecard that outlines the bigger picture structure we’re seeing and what this means going forward.
The bulls took charge last week, and the lower timeframes made serious improvements. The SPX closed above the daily 21 exponential moving average (EMA) on Friday, and the hourly chart traded at 3+ average true ranges (ATR) above the mean.
As for the bears, DXY has a daily Big 3 buy signal and is holding support at the daily 21 EMA. If DXY starts moving toward the highs near 109 and 110, there’s a strong chance that this may be the end of the rally for the market. If instead DXY drops toward the 50 simple moving average (SMA), there’s an opportunity for the market to keep trading higher.
While we have seen a 3-day rally in HYG, it has a bearish structure trading below the daily 50 SMA and printing daily Big 3 sell signals.
These rallies can be tough to sit through, but if the structure doesn’t change, it’s just a shortable bounce. Take SMH for example. We’re seeing a negative moving average crossover and four daily Big 3 sell signals. At first glance, it looks like SMH is making a big move higher but it’s just a short squeeze, for now.
In the video above, we’ll rank our “Bulls vs. Bears” scorecard for the week, analyze the different sectors, and review other names on our focus list including our new position on ENPH.
Stay Focused!