HGSI in Action Ron Brown – June 3, 2014
Demand was light again yesterday for most indexes. Only the DJT had volume above its 20 day moving average volume, but did not surpass its 50 DMA volume. The small cap indexes were the second most active based upon volume, but much of that volume was to the downside as decliners led advancers by a 1.77 margin in the SP 600. The Russell 2000 was worse at 2.17 to 1 decliners over advancers. The Composite was also negative at 1.7 to 1.
I mentioned yesterday that the indexes seemed to be struggling, and that situation remains the same. The pattern in obvious in the NASDAQ chart; stocks sell off early, and then by the end of the day, the bulls managed to buy enough to push the indexes back to the upper end of their daily ranges. Over the past three days, this has formed three Hanging Man candles which may mean absolutely nothing, but it shows that neither side is in complete control. The SP 600 chart filled the gap yesterday, but the bulls managed to buy the real body of the candle back up to 62.42% of its daily range. The SP 600 is stuck in a trading range as small cap stocks continue to underperform.