Thursday’s selling didn’t deliver ‘bull traps’ for the S&P or Nasdaq. In fact, the Nasdaq breakout looks ready to accelerate higher. When we look at relative performance, the Nasdaq is surging away from both the S&P and Russell 2000 (IWM). Where there’s a kink is the ‘sell’ trigger for On-Balance-Volume, although the indicator itself is flipping back and forth across the trigger line.
The S&P is interesting in that technicals are net positive, particularly the acceleration in accumulation, but relative performance has taken a sharp turn lower. However, price is key and with support holding I would be looking for a continuation of the bullish trend from April lows.
The Russell 2000 (IWM) is back inside its trading range that weakens the significance of Thursday’s losses. The index has found support on its 20-day MA, but the 20-day MA is criss-crossing its trigger line which weakens its ability to play as a buying zone.
For the rest of the week, it would be important for the Nasdaq to retain its breakout so it can bring the Russell 2000 (IWM) and S&P along with it. Should the S&P drift back into its prior trading range it will leave two indices working ‘bull traps’ with the potential to kill the breakout in the Nasdaq.More By This Author:Russell 2000 Drops Back Into Consolidation Dow Dips Below 40,000 Fresh Breakouts For S&P And Nasdaq
Breakouts For S&P And Nasdaq Remain Intact
