{"id":60564,"date":"2022-07-11T16:57:36","date_gmt":"2022-07-11T23:57:36","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=60564"},"modified":"2022-07-12T19:35:51","modified_gmt":"2022-07-13T02:35:51","slug":"a-time-to-shift-into-neutral-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2022\/07\/11\/a-time-to-shift-into-neutral-the-market-breadth\/","title":{"rendered":"A Time to Shift Into Neutral – The Market Breadth"},"content":{"rendered":"\n

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

The stock market failed its test of the summer of discontent<\/a>. The bear market stayed true to its name and held firm at important resistance levels. This is a time to shift into neutral in deference to the unenthusiastic buying power and the overwhelming technicals. With earnings season underway and the continuing fallout from on-going recession fears<\/a>, I see every reason to stand down and wait for clearer trade signals.<\/p>\n\n\n\n

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

The S&P 500 (SPY) lost 1.2% as it fell back toward its bear market line. Buyers lost enthusiasm for hurtling the last peak and failed to make a push to downtrending 50DMA resistance. At least the index is not (yet?) back in bear market territory.<\/p>\n\n\n\n

\"The<\/a>
The S&P 500 (SPY) lost 1.2% but stopped just short of the bear market line in a tentative bid for fresh support.<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

The NASDAQ (COMPQ) failed more significantly than the S&P 500. The tech-laden index lost 2.3% and confirmed resistance at its downtrending 50DMA. This failure also confirmed resistance at the last peak. Perhaps the NASDAQ can hold a pivot around its 20DMA (the dotted line) for the time being.<\/p>\n\n\n\n

\"The<\/a>
The NASDAQ (COMPQ) printed a picture-perfect failure at 50DMA resistance with its 2.3% loss.<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

Like the NASDAQ, the iShares Russell 2000 ETF (IWM) confirmed resistance at its prior peak. Additionally, IWM failed to challenge its downtrending 50DMA resistance. The ETF of small caps fell just short. Still, I bought a speculative July $175 call expiring next Friday as a play on a potential rebound from converging support at the 20DMA and pre-pandemic high. If anything good happens in the next week, I should be able to benefit.<\/p>\n\n\n\n

\"The<\/a>
The iShares Russell 2000 ETF (IWM) lost 2.0% and stopped just short of testing 50DMA resistance. The previous high held as resistance. Can the 20DMA and\/or pre-pandemic high hold as support or a pivot?<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n