$TWTR is another example of a tight-ranged session that could be in play beneath Friday’s low or the two-day low with a stop above Friday’s high.
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Energy leadership has been under distribution all week long with $XLE slicing through the 20 and 50-day moving averages on heavier than average volume. This bear is beginning to show no mercy with leadership thinning out.
Leadership has thinned out the past few weeks and even energy is showing signs of weakness. As mentioned in yesterday’s report, $XLE showed bearish price and volume patterns the past few weeks which led to a selloff down to the 50-day MA.
Now the daily chart of crude oil is below the 20-day EMA.
What is moving higher? US dollar $UUP, inverse bond ETFs or hedges ($TMV / $PFIX), and commodity based ETFs $CORN and $SOYB.
$CORN and $SOYB could be in play down the road as both are consolidating in a tight range near highs.
Stocks were hammered for the third session in a row with most broad-based averages down -4% to -5% and setting new lows on the year.
The sharp selloff has led to a touch/undercut of the trendline connecting swing lows on the daily charts below. Let’s see if the undercut can lead to a short-term bounce in the market.
$CNX has pulled back on lighter volume into support of the prior swing high and rising 8-day EMA. This is not an official setup, but may be one of the few long opportunities in this market for aggressive traders.
With the Nasdaq and S&P below the 20-day EMA, the timing model will be back on a sell unless the main averages can reclaim the 20-day EMA within the next day or two.
Popular sector ETFs $XLK, $XLV, $IBB, $XLB, $SMH, and $XLF all closed below the 20-day EMA as well.
$XLF closed below the 20-day EMA and created a lower high (LH) on the daily chart with the break of the prior low. May be tough for financials to push higher with resistance from the declining 10-week moving average on the weekly chart at $35.
$OPCH carries a 94 relative strength rating from IBD and is an unofficial setup based on Tuesday’s bullish reversal action off support of the downtrend line and 20-day ema. The two-day high is the trigger with a stop beneath the low of Tuesday’s reversal candle.
$AMPH is forming the handle portion of a cup with handle pattern and is worth watching for a buy point, such as a reversal candle off the 20-day EMA or a break of the downtrend line in the handle.
