Power Snapshots

May 17, 2024

Markets took a rest today after a strong Wednesday breakout. $SPY and $QQQ put in potential reversal candles (means nothing without follow through), and RISM saw a bearish kicker that almost closed the big gap from Wednesday. This came on lower volume across the board, by a good bit. This is pretty normal action. Now we will see if the buyers can hold the breakout zone.

As mentioned yesterday, the RSI and CFG on the 65 minute view were overbought and in need of some rest. It came and so far RSI is moving down much faster than price. This is a good thing. We can come in to the MA bands or RSI 40 level before much concern sets in. What I will say is most heavy overbought readings like this don’t come at the end of moves. They come more when participants are caught off guard and in the wrong positioning.

Nothing very notable here today.

A little more progress here today as a few more hit Nitrous.

It wasn’t a big down day, just enough to take off some froth.

Pressure gauges weren’t firing a lot today, but one lingering concern is the continued buying pressure in Consumer Staples and Utilities. On one hand, it shows a lot of the buying moves to those defensive spaces at the first hint of selling which shows a more negative outlook. On the other hand, it really could just signify the “One foot out the door” market is still alive and well. 

An this is on a down day across the board. Still a lot of green. 

Two subsectors mustered up enough selling to highlight the 10 day lows and that was on a day where $IWM was down well more than the larger indexes.

The Wrap up

A break after a run to new highs in the big boys. $IWM didn’t make it yet, but this battle could set it up for next week. Nothing today changed our view of buyers control.

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As always, I hope this helps!