It was a mixed bag for indices with the Russell 2000 (IWM) continuing its move towards the December swing low while Large Caps edged higher. The Nasdaq had a middling Friday, ending the day on a neutral doji despite a higher close.
In the case of the Russell 2000 the index made a small loss but also finished on a neutral "spinning top" - comparable to the action in the Nasdaq. Technicals are net negative although stochastics moved out of oversold conditions.
The Nasdaq is next up (QQQ, NDX). The index end-of-day close was similar to the Russell 2000 in that it closed on a neutral candlestick, with the exception the index finish the day higher. It remains on course to challenge its 200-day MA.
The S&P (SPX) had the best of Friday's action, finishing as it did on a higher close - a close high enough to resume the bounce rally as it looks to challenge the spike high at 4,473. The recovery has done enough to register as a fresh 'buy' in the MACD, above the bullish zero line, which is usually a good buy trigger. We will see...
It's hard to reconcile returning strength in the S&P against the continued weakness in the Russell 2000. Action in the latter index does suggest there is worse to come, but it's possible the S&P will benefit from cyclical rotation into defensive Large Caps - but without participation from Small Caps, any rally for Large Caps will be short lived.
Investments are held in a pension fund on a buy-and-hold strategy.
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