The S&P pushed the boundaries of its consolidation on a fresh MACD trigger 'buy'. However, larger gains in the Russell 2000 further diverged the relative relationship between Small and Large Caps; but this spreading relationship is net bullish for the market as a whole (because more money is flowing into speculative versus defensive stocks).
The Russell 2000 broke clear of the September swing high in very bullish action. The rising trend is nicely aligned with the fastest moving average (20-day MA) above the next fastest (50-day MA) and long term moving average (200-day MA); all of which are rising. Small Caps are also showing their leadership against Tech stocks. Very strong action from this index.
The only index caught in a bit of a conundrum is the Nasdaq. It's outperforming the S&P (bullish), but is caught in a bit of a No-Mans land with key supply at 3,200. It lacks the clear drive enjoyed by the Russell 2000.
Today will probably see some hangover style trading. It will be hard for bulls to get enthusiastic given the extent of gains over the past couple of days, but shorts won't want to commit in case they get a repeat in the days ahead. The first hour of trading will probably set the tone for the rest of the day.
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