{"id":59811,"date":"2022-05-18T21:31:03","date_gmt":"2022-05-19T04:31:03","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=59811"},"modified":"2022-05-19T12:50:56","modified_gmt":"2022-05-19T19:50:56","slug":"back-to-oversold-as-retailers-increase-pain-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2022\/05\/18\/back-to-oversold-as-retailers-increase-pain-the-market-breadth\/","title":{"rendered":"Back to Oversold As Retailers Increase the Pain – The Market Breadth"},"content":{"rendered":"\n

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

For a second straight day, retailers put pressure on the stock market. As retailers increase the pain of this bear market, bullish traders and investors lost one more place to “hide”. <\/p>\n\n\n\n

The Stock Market Indices<\/strong><\/h2>\n\n\n\n

The S&P 500 (SPY) plunged 4.0% and immediately dashed the prospect of leaving behind the price range formed by the May, 2021 low and the bear market line. Suddenly, the index looks like it will soon test the fate of the bear market one more time. Given the extreme nature of the move, I proceeded to trigger my more aggressive trading rules for oversold trading<\/a>. In my last post<\/a>, I did not anticipate an extreme downward move when I plotted to switch to options only on a higher close on the S&P 500. As a starter, I jumped into a weekly calendar call spread $410\/$405. A breakdown below the bear market line will of course open the floodgates of further downside risk.<\/p>\n\n\n\n

\"The<\/a>
The S&P 500<\/a> (SPY) created a false breakout with its 4.0% plunge back into the current churn zone between the May, 2021 low and the bear market line.<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

The NASDAQ (COMPQX) confirmed overhead resistance from its September, 2020 high. The tech-laden index now returns to potential downside risk to prices last seen in October, 2020. Still, with my more aggressive oversold trading rules in place, I speculated on Invesco QQQ Trust (QQQ) call options expiring next Friday at the $310 strike.<\/p>\n\n\n\n

\"The<\/a>
The NASDAQ<\/a> (COMPQX) lost 4.7% and nearly challenged last week’s 18-month closing low. The September, 2020 high confirmed its role as resistance.<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

The iShares Russell 2000 ETF (IWM) confirmed overhead resistance from its downtrending 20-day moving average (DMA) (the dotted line below) with a 3.5% loss. I did not pull the trigger on any IWM calls. Instead, I am content to waiting for the next (lower) buy signal near recent lows.<\/p>\n\n\n\n

\"The<\/a>
The iShares Russell 2000 ETF<\/a> (IWM) lost 3.5% and confirmed the downtrending 20DMA as overhead resistance.<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n