Friday was a good day for bulls and a nice finish to the week. The best of the action probably belonged to the Nasdaq as it bounced off the 200-day MA. The index closed above Thursday's open in what is shaping up to be a week-long swing low. The technicals are net bearish with relative performance accelerating away from the index, but if the Nasdaq can build from Friday, it will attract buyers and improve the technical picture.
The S&P has had to work from the below its 200-day MA to close on its 200-day MA. It's not an ideal scenario for the Nasdaq, but the index is outperforming the Russell 2000, so it's relatively safe as a long trade here.
The Russell 2000 is attempting to build support as its measured move target. It's not a natural area to build support, but if the Nasdaq and S&P are able to dig in at current levels, it will provide the opportunity for bulls to work off of. On another positive note, Friday's buying ranked as accumulation.
It has been a tough couple of months for indices, but last week was an indication that the ground work for a bounce is in place. Ideally, we will want to see a gap open to put some separation on the developmental lows. Let's see what next week brings.
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