Big Money Will Tip Hand This Week

Last week was a 4-day trading week due to New Year's Day. Volume was below average for all 4 days of the week, and all 3 indices gave up ground on the week. The Nasdaq closed at 4,131 (-0.59%), the S&P closed at 1,831 (-0.54%). The Dow was down -0.05%.

 

The Nasdaq and S&P both closed down on 3 out of the last 5 days, and along with the lower volume week, it suggests the market could be stalling out on the current upswing. Both indices are sitting at or slightly above their respective 10 SMAs. Power has shifted slightly to the bears, short-term. If the S&P and Nasdaq fall below their 10 SMAs, downside support is at 1,800-1,810 for the S&P and 4,050-4,080 for the Nasdaq.

 

Price/volume action over the last two weeks has been harder to read due to lower volume over the 2 holiday weeks, when many of the A-team institutional investors take vacation time off. Next week should show a lot more about the intentions of the BIGs. Both the S&P and Nasdaq are exhibiting weekly momentum divergence, but that is just a cautionary warning in the context of an uptrend.