So much for the questionable breakout in the Nasdaq or the potential short play in the S&P; both were swotted away with substantial gains in each index. There remains doubt across both indices, but if each is able to retain the bulk of its gains over the coming days, then the bearish thesis will be much weakened.
The Nasdaq was the biggest mover over the past couple of days. The doji breakout was a non-issue, and those who bought the 26K tests will be sitting pretty. Today's gain was enough to register a new high breakout, but it's vulnerable to a 'bull trap', particularly if sellers are able to drive the index back below 27K. However, we did see new MACD, On-Balance-Volume, and +DI/-DI 'buy' signals, returning technicals to a net bullish state.
The S&P had looked like it was going to stall out at its 20-day MA, but instead it delivered a big surge - likely driven by short covering - but it hasn't yet broken out of its trading range. Today's loss was small, but it remains below resistance. However, today's gain negated the bearish technicals for the MACD, On-Balance-Volume, and +DI/-DI.
Track Market Trends
The Russell 2000 (IWM) made modest gains over the past couple of days, but not to the extent that the Nasdaq and S&P delivered. Today's buying registered as accumulation, but ended in a neutral doji. However, this still looks like a trade-worthy swing low, although it could still morph into a sideways pattern.
Join Trading Exchanges
The equal-weighted S&P closed with a neutral doji as part of its swing low. It didn't enjoy the gains of the S&P over the past couple of days, but ironically, it may be more bullish given it's working off an oversold state.
Bitcoin (BTC.X) had delivered a confirmed break of 82.5K yesterday as it looks to build a broader right-hand-base. There is still plenty of work to do, but 82.5K should be strong support going forward. Trading volume has picked up substantially since mid-August, and technicals are firmly in the green. Should indices stall out in their advances, then there will always be Bitcoin to take their money.
Track Market Trends
Semiconductors are also on the move again. There is support at 10K and recent action points towards a new rally back to 14.5K. Bulls need only watch for the potential of a 'bull trap', but otherwise, the broader bull move looks to be back in play.
It will be interesting to see if Nasdaq and S&P gains can be maintained. There wasn't a broad advance across indices or in the equal-weighted equivalent, but price is king. Broader trends are bullish, and until we see a substantial change in this, my outlook remains bullish.
Comments
Log in or sign up to join the conversation.