Courtesy of Declan.
Not a day for big dramatics, but markets did well to hold on to Monday’s gains. Selling volume was lighter than yesterday, so today wasn’t seen as an opportunity to sell into strength. The one index which was perhaps a little problematic for bulls was the Russell 2000.
Here, the index lost nearly 1% as the 200-day MA stayed as resistance. This is he second time sellers have attacked this moving average. If bulls were to have a broader concern, then this index is the canary in the mine. Market leadership comes from Small Caps, and action in this index isn’t great. Bulls may look to the weak MACD ‘buy’ as a sign of something better, but 1,189 will need to hold as support.
The S&P only experienced a small loss, and held breakout support. The 200-day MA is a key moving average to defend, as lose this and both Large and Small Caps Indices will be below this moving average, leaving Tech indices ploughing a lonely furrow.
The Nasdaq is trading in a no-mans land between 5,038 and 5,096. It’s also a long way from the 200-day MA. This index will be looking to the S&P and Russell 2000 for leads.
For tomorrow, look for bulls to stick close to 200-day MAs. The biggest work to do will be in the Russell 2000. Even if there are gains, converged resistance will still need to be overcome.
You’ve now read my opinion, next read Douglas’ and Jani’s.
