Equities Open lower, but Recover
First off: Volatility has returned! In other words, don’t be cavalier about day trading. You will be seriously burned in the current environment. Pick your entry spots carefully and manage the risk without hesitation.
The equity markets opened lower, traded below Tuesday’s low, reversed and have climbed back to near unchanged for key index readings. That doesn’t mean it is a bottom.
The late-morning RSI readings from the CQG Custom QuoteBoard using 15-minute bars for the equity derivative products are indicating flat momentum for the e-mini S&P 500 (EPH7), the e-mini NASDAQ 100 (ENQH7), the DJ Euro STOXX 50 (DSXH7), and the Dow (DJI). These readings are following the sharply lower opening and the recovery underway.
The Q.NYSEVolRatio is flashing a reading of 33.43% up-volume, which is indicating selling pressure, and the Q.NASDAQVolRatio reading is 39.65 % up-volume reading, which is also indicating selling pressure.
The MACD and the RSI reading for the CLEG7, Crude Oil for February traded on Globex, is indicating a side ways trend.
The RSI for Gold (GCZ6) and the MACD action is indicating a short-term downtrend.
Yields are down in the Treasury market today.
The EUR/USD pair is trading in a short-term down trend based on the MACD and the RSI reading.
The chart of the S&P 500 and the NYSE volume ratio on a 15-minute basis shows a rebound underway following the S&P 500 taking out Tuesday’s low. The up-volume ratio is climbing as well, which indicates a shift from selling to buying. However, the market will be very volatile going forward.
The NASDAQ Composite index and the NASDAQ volume ratio readings are also recovering. I would like to see more divergence, for example, a lower low with a high volume ratio reading, such as not going below 30-percent up volume.