{"id":56796,"date":"2021-05-23T14:22:11","date_gmt":"2021-05-23T21:22:11","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=56796"},"modified":"2021-05-24T12:42:06","modified_gmt":"2021-05-24T19:42:06","slug":"t2108-update-stock-market-resigned-to-chopping-and-churning","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2021\/05\/23\/t2108-update-stock-market-resigned-to-chopping-and-churning\/","title":{"rendered":"A Stock Market Resigned to Chopping and Churning – Above the 40 (May 21, 2021)"},"content":{"rendered":"\n

Stock Market Commentary<\/strong><\/h2>\n\n\n\n

Last week delivered another key test of support levels for the stock market. The major indices passed their individual tests, but the week ended with no resolution. Bulls and bears are battling between short-term ranges that are chopping and churning traders. With the stock market resigned to this kind of chop, patient trades off key technical levels become bread and butter plays. The longer the chop and churn drags on, the more powerful the break from these ranges should become. Moreover, individual stocks that are diverging from the chop, whether from the downside or the upside, become the most interesting trades.<\/p>\n\n\n\n

The Stock Market Indices<\/strong><\/h3>\n\n\n\n

The S&P 500 (SPY) survived the edge of a real sell-off<\/a> only to return right back to that edge last week. This time the index broke briefly below its support line at its 50-day moving average (DMA) (the red line below). The intraday low touched the low from the edge of a real sell-off and rebounded right away. The S&P 500 created a hammer-like bottoming pattern and buyers continued with a 1.1% gain the next day. Still, buyers could not close out the week above the 20DMA (the dotted line below). Amazingly, the S&P 500 has traded on or away from this trendline 5 out of the last 6 trading days. Moreover, the chop and churn on the index has created a pivot around the 4150 level since early April. I reset my lower bound trigger for bearishness below what now looks like a double bottom around 4060. <\/p>\n\n\n\n

\"The<\/a>
The S&P 500<\/a> (SPY) is in churn mode between its 20 and 50DMAs<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

The chop and churn on the NASDAQ (COMPQX) has kept the tech-laden index locked in a trading range since mid-December. However, I am only now seeing the trading range with the emergence of the 50DMA as a pivot line. The uptrending 200DMA is now at the bottom of this presumed trading range. Friday’s trading failed to break the NASDAQ free of converged 20\/50DMA resistance. <\/p>\n\n\n\n

\"The<\/a>
The <\/b>NASDAQ<\/a> (COMPQX) <\/b>faded from converged resistance at its 20 and 50DMAs<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n