A surprising show of strength after three days of gains. Most surprising was the Russell 2000. It had looked ideally set up as a short play, but it made short shrift of resistance. However, technicals are still on the bear side, and there is the issue of a ‘Death Cross’ between 20-day and 50-day MAs. Shorts will next wait for the 20-day MA before attempting a second bite of the cherry.
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Better for the bulls were the gains in the Nasdaq, Nasdaq 100, and S&P. All three indices turned net bullish, which for now at least, ends the correction. Best hope for bears is a stall out on a challenge of highs. Volume has been light during the advance, which is a little worrisome, but price trumps all.
For now, look for the S&P to challenge highs: there is no other resistance in the way.
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The Nasdaq is close to a challenge on highs, and for now, it’s perhaps working on a new trading range.
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Look for the rallies to continue, although tomorrow may see a consolidation. With technicals turning net bullish once more it’s going to take more than a couple of days worth of bearishness to turn them around.
