Courtesy of Declan.
There wasn’t a whole lot of action in terms of price movement, but what action there was came on heavier volume and reflected a lack of buyer strength as they struggled to challenge last week’s highs.
Of the indices, the Dow Jones flashed a ‘bull trap’ to join another in the Russell 2000:
The Russell 2000 wasn’t able to close higher, leaving a spike high for the index. There is a play against the ‘bull’ and ‘bear’ trap, but this is looking more like a widening of the December-February trading range. Technicals are close to returning to a net bearish picture (when slow stochastics [39,1] drops below the 50 mid-line).
The Nasdaq is the strongest index and is enjoying solid relative performance against its peers. While today did finish with a bearish ‘black’ candlestick, it is best positioned to challenge last week highs and is a long way from turning into a ‘bull trap’.
For tomorrow, bears should keep an eye on the Russell 2000 – which is struggling. Bulls can look to follow the trend in the Nasdaq, which is moving up nicely.
You’ve now read my opinion, next read Douglas’ blog.
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