Dow Jones Industrial Index Edges Breakout as Russell 2000 Reverses Off Resistance

There wasn't a whole lot to report from Friday with all indices inside dominant consolidation indices. Best of the action belonged to the Dow Industrial Average as it broke out of its mini-consolidation, nested inside its 2-year consolidation. Again, the larger consolidation is dominant, so the significance of Friday's action is reduced. There are existing 'buy' signals for the MACD trigger and On-Balance-Volume but longer-term stochastics are still in bearish territory.

 

The Russell 2000 is an index under pressure. Friday's action was low key, but it marked a third-tag reversal off widened resistance. With the index so close to major, consolidation support, it's a worrying time for the index. Monday or Tuesday needs to be a big rally day to restore some form of confidence. On some good news, there was a fresh MACD trigger 'buy' - although it occurred well below the bullish zero (mid-) line.

 

Not a whole lot to report from the Nasdaq as it finished with a bearish candlestick, but this occurred outside of the consolidation - and is perhaps reason enough to redraw resistance. Volume was lighter, and there was a mixed technical picture with a MACD trigger 'buy' offset by the sell in On-Balance-Volume.

 

The S&P didn't quite enjoy the same breakout as in the Dow Industrial Average and is in a similar picture as the Nasdaq. The 'black' candlestick is another bearish marker against the stock but is offset by the 'buy' triggers in the MACD and On-Balance-Volume.

 

On more positive news, the Nasdaq Summation Index (a relatively smooth breadth metric) offered what looks to be a new 'buy' signal. There was a bullish cross in the 3- and 5-day EMA, alongside new 'buy' signals in the MACD and CCI. I would like to see the ADX stronger, but this is something worth watching, even if the parent Nasdaq is looking a little directionless.

 

For Monday, we will want to see the Nasdaq push on out of its consolidation, following the action of the Dow on Friday. This should help the S&P and Russell 2000. The only problem will be Trump tweets, and whether the market decides to listen to the fool.