Power Snapshots

May 24, 2024

The reports for our upcoming product launch are now coming together and taking shape. As you can see, the Triple Play charts have been successfully integrated into the Power Snapshots section. This integration provides valuable context and background information before we dive deeper into the Power Snapshots to examine how the high-level activity and performance metrics are broken down and manifested under the hood.

Today's Highlights:

    • Bearish Engulfing patterns on higher volume 
    • $IWM was a follow through candle as it blows through the MA bands
    • Energy held up the best, but overall there was really no place to hide but $NVDA

TP Daily charts saw big marubozu candles after a strong gap up at the open.  The $NVDA earnings drove the initial excitement and held its gains on the day while most everything else promptly reversed shortly after the open.  We have been mentioning the high chance for a retest of the breakouts in $SPY and $QQQ and today’s action increases the chances of that, but follow through is still key on these indexes. $IWM really saw its follow through yesterday, leading down once again.

$IWM didn’t get a spike, instead it turned tail and fell further bringing the larger cohorts with it. The only one to hold the MA bands and the RSI bull range was $QQQ. Two of the three in bear ranges is a red flag until we see price action retrace more than 50% of the drop and preferably RSI moving back over 60. If we rebound from here, $SPY still has a chance to spike back into the RSI bull range, like $IWM did yesterday. It didn’t happen for $IWM, we will see what the reaction is here going forward.

The broad swath of selling cleared more of the green spaces and put these readings back to the neutral positioning. Not bearish, just showing less stocks are trending above these various timeframes. This started cooling late last week, but still digestion even after yesterday’s action.

RSI continues to come off the momentum highs. Many CFGs are starting to dip below zero with RSIs above the 40 level. We should monitor these for reversals if the market does not get downside follow through. Those that have price still highlighted in green are still in trend above the Number which is the midline of our MA bands on the charts. Many of those are still on Nitrous as well. There is strength under there, but we have to be open to the bear raid days. I worry more when I see them in a downtrend and when they cluster, but one offs often happen in uptrends. We don’t know if this is one of those yet or not, but as always in markets, it’s more about the reaction than the news/event.

There really was no where hide. A few Breadth Thrusts are getting in the range for short term washouts. Under 40 and especially under 35 readings are often getting overstretched to the downside in the shortest time frame. These can be good spotting near term reversals, but have very little longer term implications.

Pressure gauges paint the same picture of no where to hide. Very little buying pressure anywhere.

Not today…

New lows lit up today as to be expected. Mostly contained to the 10 day readings, but the 21 day lows also kicked up a good bit. Hotel, Restaurant & Leisure has spread quickly to light up on all time frames, as it has moved to the bottom of the relative strength rankings over the last month. It lagged the entire bounce, so a big down day like today puts it challenging the lows from mid April. Worth keeping an eye on as a gauge on the consumer health here.

The Wrap up

Yesterday was one of those liquidation days that is a combination of profit taking that turns into fear. In this one foot out the door market, it shouldn’t be too surprising, but the reaction to the big candles over the next few days will be telling. Let’s not forget, the daily and weekly RSI bull ranges remain solid for now, so we need to see if the 65 minute chart can reclaim its bull ranges or not. Yesterday opened a lot of eyes, now we see how they react.

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As always, I hope this helps!