Starting To See Separation And Some Follow Through For Nasdaq And Russell 2000

Things are picking up for bulls. The Nasdaq added a solid white candlestick to make the current move look more like the breakout that started (and stalled a little) last week. Add to that, Wednesday's buying came with confirmed accumulation. Technicals are net positive, so it's good news all around for the index. 

Given that, we do have a pending breakout situation in the S&P. Traders looking to preempt the move may start jumping aboard before the new high alerts kick-off and the algos join the fun. There are still bearish technicals in the MACD and On-Balance-Volume (another reason mechanical trading strategies may hold off for now), but these are likely to turn positive if not by the close of business today, by early next week most likely.

Even my index of concern, the Russell 2000 (IWM), is doing better. Wednesday's close saw an important finish above its 50-day MA, and while it's early days Thursday this looks like it will hold the moving average today. Again, there was solid accumulation backing yesterday's buying. Altogether, this is a subtle, yet important shift, in favor of bulls for the index. 

While I post this early Thursday, we have cleared the important opening half-hour of trading, and so far, so good. Yesterday's accumulation action marks the first follow-through day for the Nasdaq breakout. I'll be looking for a new breakout in the S&P and an opportunity for the Russell 2000 to start building a solid right-hand-side base to end the decline that kicked off in the latter part of 2021; getting above $200 (IWM) will be key in this regard. 

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Disclaimer: Investors should not act on any information in this article without obtaining specific advice from their financial advisors and should not rely on information herein as the primary ...

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