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Bouncing into Next Week May 28, 2022

Posted by Tom in Thoughts.

May 27, 2022 – First off, Happy Memorial Day (for those in the US).  This is especially rough with the shootings in Texas and a war raging in Ukraine.   We’ve got to do better.

The market is beginning to show some signs of strength.  Sentiment is Neutral, Money & Volume Flows are Bullish, Price Strength is Bullish and Volume is low (possibly due to the holiday in the US).

click on chart to enlarge

Next week we need to see a commitment with closes above 12202 (roughly 420 on the SPY), that’s the first line of resistance for prices to move higher.  The next spot is 12985 on the NASDAQ Composite Index.  I’ve drawn in 3 scenarios, Green is the most optimistic, Yellow shows a consolidation phase and Red is a retest of the lows.  I’m favoring the Green right now but the pattern may develop at the 12202 level and not the higher 12985 level.  The question will be does a substantial move higher last for more than a couple of weeks?  I question that.

The low volume last week may be due to the holidays or due to lack of commitment by large intuitions.  We’ll know that on Tuesday.  I continue to see a large number of “protective Puts” in the market most expiring the 3rd week in June.  The big guys have not given up on downside protection yet.

The Short-Term Sector Strength table is below:

It’s encouraging to see sectors other than Energy strengthening, but again, that’s short term.

Have a good week and watch for volume coming back into this market, it will confirm one scenario or the other.    ……….  Tom  …………..

Price chart by MetaStock; table by http://www.HighGrowthStock.com. Used with permission.


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