Battle Lines Finely Balanced Between Buyers and Sellers

by | Mar 27, 2023

A marginal up-week for the main indices doesn’t tell the whole story, and they’re not all in sync in any case.

The Nasdaq is buoyant while the Dow and Russell struggle and the S&P flirts with not quite knowing what to do.

One common theme I’ve referred to over the past few weeks is that of the majority of likely setups not being of the best quality. That theme continues today, and contributes to my ongoing guidance.

I also mentioned how the S&P would be most likely to chaotically range bound … which is exactly what has happened.

Market Outlook:

The S&P is clinging on for all its worth around the range within which it has been trapped the last several months. As I mentioned last week, a washout to the January, June and/or October lows would be best for everyone so we can get back to more robust technical conditions.

The Main Indices:

The SPDR S&P 500 ETF Trust (SPY) continues to be volatile within its range.

The Invesco QQQ Trust (QQQ) continues to confound, but this seems likely to be short term.

The iShares Russell 2000 ETF (IWM) is still looking good for further downside, though another test of its 200-dma would present the optimal opportunity.

The SPDR DJIA ETF Trust (DIA) is also looking weak just under its 200-dma.

Guy Cohen

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