2018-05-03: Update on OMX30, SP500 and Investor

OMX30

Since early November, OMX 30 has been trending downwards. Since then we have had three, and we are touching upon the fourth, attempts to break out above the 1600-level. However, after two touches on the mighty resistance level around 1500 (the lower black line), price action has stabilised. Especially after the breakout through the ceiling of the rectangular box that squeezed the price level for three weeks the upward thrust has been powerful – just look at the volume.

At the moment, we find ourselves in a sensitive spot of the chart. Price action has been strong enough for a breakout over the 1600-level to seem plausible. On the other hand we are facing the resistance of MA-200 (black moving average), the 1600 level and the roof of the negative trend channel. In short, not the best time to place our bets.

Verdict? As all signals are pointing down and caution has to be taken when playing the bulls. Bearish signals, on the other hand, are worth acting on (however, keeping the force of the recent upward movement in mind).

Long-term view: Mildly negative

Mid-term view: Negative

Short-term view: Uncertain

20180502-OMX

S&p-500

 
Since late January, the SP500 index has been trending lower in a triangular squeeze. Apart from short-lived pushes north, price action has been somewhat subdued. Support on the downside is strong, with both the MA200, which has not been broken in over two years, and the 2600-ish level. Trapped in this boiler of increased market insecurity, and thus more contained prices, momentum for a powerful move is building up. A breakout which well could be strong enough to accomplish a bearish breakout, should we move in that direction. However, we are not there yet and in the short-term I will be keeping an eye on the sloping trendline (dotted), the box marking the gap-zone from March 22 and the subsequent lows and the MA200 moving average. Put shortly, at this moment it is better to wait for a breakout before acting.

Long-term view: Positive

Mid-term view: Negative

Short-term view: Uncertain

20180502-sp500

 

Investor

Investor has been trending downwards for some time in a very fine trend channel (which is a good thing, as it, according to my experience, increases the chances of them “working”). Since the carving out of the double top in November 2017, we have seen three downturns indicating the strength of the upper bar of the negative trend channel. As MA-200 meets up on the upside, I deem the chances of a turn to the downside as plausible. Should we, however, continue upwards it is easy to know where to sell. According to me, a good indicator that the negative pattern setup has ceased to be actual, and that we are heading north, would be if the price action breaks above MA-200, and the sloping trend, without a quick retracement down. That is a seller. To sum, the pronounced red candlestick-bar today gives an indication that we are heading lower, as the setup appears clear-cut for the bears.

Long-term view: Negative

Mid-term view: Neutral

Short-term view: Positive… turning negative?

20180502-OMX

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