Courtesy of Declan.
Today’s late recovery returned initiative to bulls. The Nasdaq finely placed to challenge new highs, helped by the major breakout in the Semiconductor Index; an important economic barometer.
Unfortunately another economic bellwether, the Russell 2000, is not quite there but could push beyond its declining channel should gains continue elsewhere.
The S&P is nicely placed to have a good Friday, holding above the critical 2120 level which has offered stiff resistance in the past.
While indices are ready to challenge highs, breadth metrics do offer a note of caution. Nasdaq breadth metrics have been in decline since peaking in 2013/14, creating a bearish divergence to the parent index, leaving markets vulnerable to another 2011 style sell off.
For tomorrow, a strong finish would set a positive tone heading into the weekend. But first steps first, new highs are required to build bullish confidence.
