And the bulls returned! As pointed by the XBP Market Internals Put/Call Ratio indicator last week, the “big money” reverse their positions to buy the dip and advance the market.
We saw the main recovery in the NASDAQ index, with 5 consecutive days of advance, crossing above the 50 days SMA level (blue line). To confirm our hypothesis, we also had the XBP Efficiency Ratio indicator signaling a reversal in price action near the oversold area, and it even suggests that this time we could soon reach new all time highs.
The S&P500 held well above the 50 days SMA support level. Not much surprise here as this level has proven to be a good support level for the entire 2021.
The Russell 2000 is the one index with the most mixed signals. It did rebound but with less enthusiasm than the others. It is facing resistance in crossing the 50 days SMA level and we can also draw a trend line (red) to forecast further resistance ahead. The XBP Efficiency Ratio does not provide clean readings either. We can see that in the past new higher highs in price action where met with lower highs in the indicator, which seems to act as a leading indicator in the Russell. We better keep a closer look at it to see how it evolves.
Finally, the analysis of the XBP Market Internals Put/Call Ratio indicator shows us that there are internal market forces on the bullish side with plenty of room to go. Also, the VTI index found support at the 50 days SMA level and the XBP Efficiency Ratio indicator hints at possible new all time highs ahead.
As always, we will keep monitoring the markets and reacting to our signals, and for now we expect green days ahead. Good luck!
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