Markets Break Out On Jobs Data, But It Could Be Too Early To Trade New Highs

Markets Poised For New Round Of Breakouts


Traders got the spin they wanted out of which offered the impetus for the breakouts in lead indices. It’s hard to understand how markets could perceive things as out of the woods but yet here we are, and you play the hand you are dealt.

The pack leader is the as it closed on the February swing high—the next move will see it at all-time highs, following the lead of the . These gains have allowed the MACD to accelerate higher, taking it out of its flat-line condition. Other technicals are very positive even though there is a relative underperformance against the .

COMPQ Daily Chart

COMPQ Daily Chart

The breakout in the Semiconductor Index was a little reluctant given it occurred with a ‘gravestone’ doji. If there is a gap lower it would open up the twin problem of a ‘bull trap’ and a bearish evening star but for now it’s a positive—but perhaps it’s not a candlestick to buy.

SOX Daily Chart

SOX Daily Chart

The S&P managed a breakout of its own, although it did so from the swing high in February (it’s still got a few weeks before it gets to challenge all-time highs). Friday’s buying did come on significant buying volume, marking it as accumulation.

SPX Daily Chart

SPX Daily Chart

The (via iShares Russell 2000 ETF (NYSE:)) is caught a little between a move above the 200-day MA and the convergence of resistance between the February swing high and an earlier rising trendline. Technicals are all positive and Friday’s buying ranked as accumulation.

IWM Daily Chart

IWM Daily Chart

The breakouts are important as they look to draw a line underneath the COVID-19 sell-off, but until the second wave of the disease is navigated, (immunity running around perhaps a max of 20% of the population, but more likely 10%, and a vaccine 12-months away from development, and perhaps 18-months from ready availability), it does seem a little early to be trading new highs.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link

Declan Fallon


Leave a Reply

Your email address will not be published. Required fields are marked *


About us

InvestLab is a financial services technology company focused on the global trading market. Founded in 2010 in Hong Kong, the company develops trading, market data, and social research products that enable individual investors and small to mid-size brokers to access global markets. We provide brokers and financial institutions cross border capabilities for retail investors into 43 markets globally.


CONTACT US

CALL US ANYTIME