Weekly Market Summary
SP500 is in much better shape for a bounce than NASDAQ. Either way, market indexes are in a downtrend until prices move above the downtrend line shown in the charts below.
The blame for much of the recent drawdown is being placed on the sharp increase in 10 year bond yields over the last month or two.
However, the markets being in severely overbought conditions certainly helped the sharp reversal in price trends.
Let’s review the QQQ and the SPY charts:
Prices on the QQQ have fallen precipitously below the supporting weekly trendline as shown on both the weekly chart and the daily chart.
This move down in the index was worse than the drawdown in the broader market due to the sharp weakening of previously leading FANGT stocks.
A move above the daily trendline drawn across the price highs in addition to other technical indicators strengthening is necessary for the current downtrend to reverse.
The SPY chart is not as bad as the QQQ.
Prices on the SPY are holding right at the weekly upsloping trendline. So a move higher for the SPY might be easier than the QQQ.
Either way, like the QQQ, the SPY prices need to move above the downsloping trendline with a strong showing in additional technicals before the uptrend can resume with any confidence.
