Subscribers Special Report Via -TradesAfterWork5/3/2020 Issue 15Posting this to share with our readers: (We really like these Weekly Technical Briefs by TaW).The beginning of a new month means that we can look at the previous month's monthly charts, and see what the long term trend of the market is. Below is a chart of the Equal Weighted S&P 500 Index (RSP). The advantage of the equal weighted index is that we can get a granular look at what the health of the real market is. The S&P 500 Index that people typically look at is a cap weighted index, and that can really skew what is going on behind the scenes of all the stocks in the S&P 500 Index. For example the 10 largest holdings in the cap weighted S&P 500 Index currently make up over 25% of the move in the S&P 500 Index. So as you can see, this can really color what is actually happening in the market, whereas in the Equal Weighted S&P 500 Index (RSP) each stock gets one vote; each stock is given the same weight.The monthly chart we are looking at is showing the price action in the 36 Month moving average for the equal weighted S&P 500 Index. During the months of March and April RSP closed below the 36 Month moving average. That will need to change and quickly if we are to enter into a positive long-term trend in the market. The Relative Strength Index (RSI) is also below 50%. We will need to see the monthly RSI rise and stay above 50% in order to change the long term picture of the market. The previous two times (1 and 2) that the monthly RSI was under 50% the market did not fare well. At a minimum, in order to sustain a bull market the RSI will need to find support a the 50% level as at A-D below. In the picture below the RSI is not bouncing above the 50% level but is under the 50%. (E)Can you see the difference in charts as we look at the strongest index, the Nasdaq Composite Index? Notice how this index prices closed above its 36 Month moving average at the end of March and April. That is a healthy long term trend, again showing where the relative strength lies with the indexes. Compare the RSP chart and then look at the beautiful bounces off of the 50% level below. (A-G) It doesn't get any better than that. As you can see the Composite's RSI closed at 60.35%.In short the long term trend of the Nasdaq Composite is positive, but the problem is that most peoples retirement accounts and 401(k)'s are allocated more in line with the S&P 500 and not with the Nasdaq Composite. The Nasdaq Composite would be considered much too risky and concentrated too heavily in technology. Technology stocks make up nearly 40% of the holdings of the Nasdaq Composite Index. This is a good recipe for traders, but unless the scenario changes, this will not fare well for most Americans in their retirement monies and 401(k)'s. This is what would be referred to as a "stock pickers market". Once the volatility begins to stay steady again there will be plenty of trades to choose from, with many likely coming from the Nasdaq Composite Index.As we move into the Intermediate term trend of the Nasdaq Composite, we can see some challenges ahead that will need to be overcome. Obviously, we still have a death cross with the 10 Week SMA crossing below the 40 Week SMA. As we look at the candlestick that closed on Friday, you can see that it is a "shooting star". A weekly "shooting start" candlestick or price movement shows evidence of selling. The confirmation of the "shooting star" is reinforced if we have another down week. The Moving Average Convergence Divergence (MACD) is still negative, and both the Stochastics and the RSI appear to be trying to curl down. This would indicate that momentum is beginning to slow. The Nasdaq Composite seems to be trying to digest some of its recent gains since the March 23rd run up.Looking now at the daily chart of the Nasdaq Composite, we can see that it is likely that we will continue to see more selling. Notice that the prices of the Nasdaq Composite have breached its 12 Day SMA (dotted blue line). When that happens after a V shaped recovery the odds are very good it is time to rest. That is why it broke the 12 Day SMA.You will also notice that the trendline that was established since the March 23rd low has also been broken (black line). Look at the MACD, Stochastics and the RSI. They are all trying to curl down; they look tired. No market can continue to go up without a rest, especially if you want to break through the overhead supply from the February sell off. Don't forget that the Nasdaq Composite Index is the strongest Index and if it's trading below its 12 Day SMA, what are the odds that the S&P 500 will not follow with selling too?If you have any questions or I can be of any assistance please don't hesitate to contact me.Take Care!Learn more about them here - TradesAfterWork.com -https://twitter.com/BERNARDCLAY9!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+"://platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");https://twitter.com/BERNARDCLAY9!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+"://platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");.Are you interested in trading stocks to supplement your income or make a living? 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