The technical indicators are giving a mixed picture. On the positive, markets are oversold and resting on good support. On the negative, the market has endured significant technical price damage and will have to heal before moving back to recent highs. In addition, longer term DeMark price exhaustion signals haven’t come close to giving buy signals indicating that the market still has a lot of work to do over the summer. So while a lot of price damage has been done, a better market will only resume after a "time-correction" i.e. time will have to pass as the market builds a base as stocks move from weak to strong hands.
The NYSE is in an interesting position because it is oversold on the two main breadth indicators. Both the Summation Index and the Bullish Percent Index are the most oversold they have been since 2002.
In addition, the NYSE is resting on strong support from an upward sloping channel (in blue). Typically, highs point to lows and the two peaks from 2005 now point to a bottom occurring at these levels.
The NASDAQ isn’t in as good a technical position as the NYSE. While it’s oversold in the near term, the index isn’t nearly as oversold as it has been in previous corrections. That indicates the NASDAQ breadth indicators can fall another 20 – 30% before reaching extreme oversold conditions.
Although breadth indicators can continue to deteriorate, price for the QQQQ is resting on some good support in the near term. The $37.75 – $38.25 level has provided some important pivot points in the past two years. The QQQQ would have to turn extremely negative if it were to take out this level. In addition, the longer-term, slow stochastic have reached the bottom of the range indicating that even though breadth indicators haven’t reached oversold levels, price has.
The brother stepped down for health reasons, Michelle “took office” described as “Maybe tomorrow substitutions, position is not important, it is important to make their own ability as a family business to do something.”