Market Direction and Stock Trends

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NASDAQ Composite Index (COMP) »» Weekly Summary Analysis
By: Marty Armstrong | May 21, 2022

The NASDAQ Composite Index Cash closing today at 1135462 is immediately trading down about 27% for the year from last year's settlement of 1564497. Caution is now required for this market is starting to suggest it may rally further on a monthly level. Up to this moment in time, this market has been declining for 6 months and if the market continues to remain beneath the previous month's low of 1231574 on a closing basis, then it will remain weak for now. This price action here in May is suggesting that this has been a bear market trend on the monthly level. As we stand right now, this market has made a new low breaking under the previous month's low dropping to 1103569 intraday and remains trading beneath that level.

ECONOMIC CONFIDENCE MODEL CORRELATION

Here in NASDAQ Composite Index Cash, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2009 and 2002. The Last turning point on the ECM cycle high to line up with this market was 2007 and 2000.

MARKET OVERVIEW
NEAR-TERM OUTLOOK

The historical perspective in the NASDAQ Composite Index Cash included a rally from 2002 moving into a major high for 2021, the market has pulled back for the current year. The last Yearly Reversal to be elected was a Bullish at the close of 2019 which signaled the rally would continue into 2021. However, the market has been unable to exceed that level intraday since then. This overall rally has been 12 years in the making suggesting it could still press higher for another year.

This market remains in a positive position on the weekly to yearly levels of our indicating models.

The perspective using the indicating ranges on the Daily level in the NASDAQ Composite Index Cash, this market remains in a bearish position at this time with the overhead resistance beginning at 1156628.

On the weekly level, the last important high was established the week of March 28th at 1464690, which was up 2 weeks from the low made back during the week of March 14th. We have been generally trading down for the past 7 weeks, which has been a very dramatic move of 24.65%.

Immediately, this decline from the last high established the week of March 28th has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 1383759 made back during the week of February 28th. Nonetheless, that high was actually lower than the previous high made the week of February 7th suggesting this market has really been running out of sustainable buying for right now. This decline has been rather important penetrating the previous low formed at 1255535 and closed beneath it settling at 1135462 warning we may have a shift in trend unfolding. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 6 weeks overall.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are rising at this time with the previous low made 2018 while the last high formed on 2021. However, this market has rallied in price with the last cyclical high formed on 2021 warning that this market remains strong at this time on a correlation perspective as it has moved higher with the Momentum Model.

This market is trading well beneath that high of November 2021 which was 1621223 by more than 10 percent. Critical support still underlies this market at 1082240 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak trading beneath last month's low.

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