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Small Gains On Accumulation

Courtesy of Declan.

Markets finished the week with an accumulation day on Friday, with bulls coming in at 20-day MAs for the S&P and Nasdaq.  The Russell 2000 also dug in, although buyers worked with no clear support level, but Friday’s finish may offer an opportunity for a swing low to develop if there is some upside on Monday.




The S&P worked a rally off its 20-day MA, but did so in the absence of accumulation. The ‘sell’ trigger in the MACD hasn’t been reversed, but other technicals are still healthy.






The Nasdaq experienced a similar bounce as the S&P, but it was able to do so on higher volume accumulation.





The Russell 2000 is working a potential swing low with support pinned to a minor support level from February.





However, all Nasdaq breadth metrics are net bearish, which would suggest further weakness for the parent Nasdaq is a strong possibility. This could mean Friday’s gain is a ‘bull’ trap of its own.







As for shorting opportunities, the Semiconductor Index may offer the best risk:reward opportunity. The doji finished just above the last high of 991, but it also closed at former channel support – now resistance. A move to the slower rising trendline is a potential target.





For Monday, shorts can take a look at the Semiconductor Index, while longs can wait and see if there is a further advance for the S&P and Nasdaq from the bounce off its 20-day MA.   With Brexit due to start next week there may be other distractions.




You’ve now read my opinion, next read Douglas’ blog.




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.






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