The SPY's daily graph isn't looking as good with a few indicators that look very bearish on the daily graph. The NASDAQ on the other hand appears to have rallied out of its slump from the beginning of the day, providing a breath of relief for bullish investors, however, this trend has not been confirmed yet and suggests merely a temporary shift before continuation of the larger trend.
For the current market environment, I won't be relying too much on the RSI as it provides too many signals and that becomes unreliable if you want to swing trade with minimal trades. Although using indicators the shorter time frames are a bit more unclear and speculative, what is certain is in the longer time frames, especially the monthly graph for both NASDAQ and S&P which both suggests that the markets have reached significantly overbought levels since the COVID declines; this may indicate that the markets are more than ready for a good correction to reset before more upside momentum can be made. In the daily graphs, I can currently see a bearish divergence in the peaks of the price action, in the troughs nothing has been confirmed yet as this will build itself in the next few days; this can be supported by decreasing volume over time (this I had to source from QQQ since the index's do not have volume) which indicates there are fewer participants in the uptrend. Thus, allowing me to assert some bearish sentiment for this trend as many are no longer exposing themselves to higher prices.
With all that being said there isn't too much new relevant information to analyze but the most recent trading sessions help us gauge that investors are not ready to give up their optimistic perspective of the financial markets as there is yet not much pessimistic news to allow that sentiment to change. However, with important events lined up for the next few periods that may change in that time. Until then very I am neutral due to the fact that everything can change at a moment's notice. I AM leaning more towards the downside as valuations peaked and investor perspectives grow more irrational.
Have fun!
Henry
For the current market environment, I won't be relying too much on the RSI as it provides too many signals and that becomes unreliable if you want to swing trade with minimal trades. Although using indicators the shorter time frames are a bit more unclear and speculative, what is certain is in the longer time frames, especially the monthly graph for both NASDAQ and S&P which both suggests that the markets have reached significantly overbought levels since the COVID declines; this may indicate that the markets are more than ready for a good correction to reset before more upside momentum can be made. In the daily graphs, I can currently see a bearish divergence in the peaks of the price action, in the troughs nothing has been confirmed yet as this will build itself in the next few days; this can be supported by decreasing volume over time (this I had to source from QQQ since the index's do not have volume) which indicates there are fewer participants in the uptrend. Thus, allowing me to assert some bearish sentiment for this trend as many are no longer exposing themselves to higher prices.
With all that being said there isn't too much new relevant information to analyze but the most recent trading sessions help us gauge that investors are not ready to give up their optimistic perspective of the financial markets as there is yet not much pessimistic news to allow that sentiment to change. However, with important events lined up for the next few periods that may change in that time. Until then very I am neutral due to the fact that everything can change at a moment's notice. I AM leaning more towards the downside as valuations peaked and investor perspectives grow more irrational.
Have fun!
Henry