There wasn't a whole lot of action in the indices today. The only index to come out with anything was the Russell 2000. I thought we would have seen today's gain yesterday, but it was welcome all the same. Today's gain for the Russell 2000 also resulted in a return of the net bullish technical picture.
There was still a little doubt in today's action with the bulk of the gains coming on the morning gap. However, it did mean the brief pause from Friday was negated by today's push higher.
The S&P made a challenge on 2,000, but it wasn't able to stick the move higher. Volume was lighter, reflecting a drop in buying interest, but with new highs for Large Caps and Tech indices it's hard to see past the bullish picture.
Friday's action marked a balance between bulls and bears. Tech and Small Cap indices finished with indecisive doji, marking a swing trade opportunity; buy/sell break of Friday's high/low with a stop on the flip side. The S&P and Dow closed lower, but not enough to suggest bears finished the day in control.
The losses in the S&P weren't enough to trigger a 'bull trap', so the long-side play is still favoured. Selling volume was also down on Thursday's buying, another reason to suggest bulls have control. Technicals remain net bullish.
It was the only index with something to play for today, and that play was bullish. The S&P nicked a close above 1,992, which leaves it vulnerable to a 'bull trap' tomorrow. Other aspects, like technicals, are bullish, which keeps the long side favored in this market.
It was more of the same from the Semiconductor index: a solid gain which took the index ever closer to 652 resistance. All of which is helping the Nasdaq and Nasdaq 100 maintain their push to all-time highs. Technicals for the Semiconductor Index are net bullish. Weakness will offer itself as a buying opportunity, particularly at the breakout line and/or 50-day MA. Risk can be measured from the 38.2% fib retracement at $616.25.
A further acceleration in the rally took indices past key moving averages and into a space with limited overhead resistance. One of the indices hardest hit by the sell off was the semiconductor index. While it hasn't challenged July highs it did close above the neckline and 50-day MA. Technicals also finished today net bullish.
Well, half of what I suggested might happen, happened. The Nasdaq effectively limped a breakout, but the Dow had a far more enthused push higher. If there was a red flag for either of the breakouts it was the lack of volume, but given the extent of the moves there is room for some give back while maintaining the breakout.
The Dow closed bang on its 50-day MA, which is another resistance level, but the breakout is of greater significance than resistance at its 50-day MA.