Russell 2000 Holds Gains

There wasn't a whole lot of change to the week for indices but it was good to see the Russell 2000 hang on the gains generated by Monday's gap higher. Better still, it looks to have killed the bearish implications of the previous week's bearish black candlestick. All we need now is some follow through higher, helped by some strong technical support - including excellent relative performance.

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S&P and Nasdaq Again Can't Get Past September Highs

Why the focus on the September highs? Because they came with extremes in breadth metrics for the S&P and Nasdaq - marking levels typically associated with a major top. The action from Monday had looked like it was going to end the consolidation established from the September peak but again it was not to be. Today is not the start of a crash, but it is disappointing. 

The S&P is back at breakout support on the back of heavy volume distribution. The loss added to the relative loss against the Russell 2000. While today marked a loss, the presence of support hasn't totally negated bullish opportunity. 

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Indices Recover Lost Ground

Another bright start to the week on more positive Covid19 vaccine news. Today's gain was accompanied with higher volume accumulation across indices, setting them on course to negate the ultimate bearishness of last Monday's candlesticks - despite the initial positive vaccine news then.  

For the S&P, while today's gains pushed it well inside the spike high of the inverse bearish hammer, relative performance against the Russell 2000 took a big step lower. Under these circumstances, this may be seen as bearish but Small Cap leadership is critical to the success of any long term bull market. We will have to wait and see what the rest of the week brings. 

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S&P Starts Challenge on Spike High

I've mentioned the importance of Friday's close on the Russell 2000 here, but the S&P finished the week doing its own thing as it worked to reverse the dominant bearish inverse hammer. This particular candlestick is of particular concern, not just because of the pattern but the huge volume which went with it. However, the end of week finish was positive as the index was able to poke its head into the spike high of the inverse hammer. 

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