MarketQuadrant 51/2024
Weekly market outlook
→ Hard-money market transitioning into a no-money market
→ Anticipating a volatile bearish continuation till oversold.
→ Swing portfolios should hold with strict stoplosses. Can even go into all-cash if no cushion. Conditions not at all favourable for new positions.
⦿ Bias: Neutral
⦿ Breadth: Worsening
⦿ Momentum: Negative & worsening
⦿ Swing: Early Downswing
Bias → Neutral
After remaining positive for past 3 weeks, currently the bias is neutral,
52-week Net New Highs are not positive for past 3 consecutive days.
The Monthly (20-day) NNH are also not positive for past 3 consecutive days.
Only the Microcap index is above the 50-day MA for past 3 consecutive days.
Breadth → Weak
█ Breadth with regard to extension: The % of stocks above the 10-day MA & 20-day MA, are now way below the 50% mark. Till the 10-day MA line stays below the 20-day MA line, we are in a bearish swing.
The % of stocks above the 50-day MA have now gone below the 50% bullish threshold now.
The % of stocks above the 200-day MA are now (barely) above the 50% threshold for 4 weeks now.
█ Breadth with regard to participation: Stocks 15% up in 5 days have stayed low all this week, which shows that the broader market participation has dried down.
Stocksgeeks MBI gave us a warning day on 18th-Dec (Wednesday), which was followed by a weak recovery next day. We have closed the week with MBI turning red. The probability of trades working in such an environment is quite low. One should sit out till either till the MBI turns green with strong numbers, or till we get oversold. The 20R & 50R numbers have also turned red, indicating that we are now in a downtrend on all timeframes now.
Momentum → Negative & worsening
All broad indices are having negative & worsening momentum.
Most sectoral indices are having negative & worsening momentum.
Only index having positive & improving momentum is Pharma.
Swing → Early Downswing
Most broad & sectoral indices are in an early downswing.
Pharma & Healthcare are still in a confirmed upswing. Other this these, this week saw deep cuts across the entire market.
Swing Confidence is 0, which means that the portfolio should not be having any open risk.
That’s all for this week. If you'd like to know when I publish something new, just subscribe to my newsletter and you'll get the latest sent direct to you.
Excellent contribution to the trading community. Thanks Nitin.