The trendline in play for the S&P from March was breached on higher volume distribution. However, the index remains inside a secondary trading range bound by 2,040 and 2,130. Technicals are also net bearish.
With the selling in the S&P, it's now down to the Nasdaq currently testing its trendline; a support level dating back to January. The index also sits near its 50-day MA.
The Russell 2000 breakout held for a fourth day, but not before it gave back some of Friday's gains. However, there is a convergence of support at 20-day and 50-day MAs to help bulls. While Large Caps disappointed, Small Caps have an opportunity to pick up the slack. Recent action has accelerated relative outperformance against the S&P.
For tomorrow, bulls can look to the Nasdaq and Small Caps for buying opportunities at support. Large Caps are caught in a bit of a no-mans land; a rally at this point will quickly bring the S&P and Dow back to former support, turned resistance. But there is no natural support nearby for these indices - next up are 200-day MAs.
Comments
Log in or sign up to join the conversation.