Sunday, June 07, 2015

S&P Holds Trend Support, Russell 2000 Regains Breakout

A mixed bag of action. The S&P finished Friday bang on trend line support. The equivalent trendline which was breached as support in the Dow. However, Friday saw higher volume distribution for the S&P, but not the Dow. The S&P saw a net bearish turn in technicals, which followed an equivalent turn in the Dow.


The Dow is building for a move back to its 200-day MA. It hasn't made it there yet, but it will likely do so soon.


The Nasdaq recovered some of the lost ground from Friday's intraday action. However, it remains range bound inside the broader bearish wedge and it hasn't yet offered a suggested direction going forward.


There was no such doubt with the Russell 2000. It experienced a reversal on Thursday which left it at bull flag support, but Friday saw a resumption of buyer strength after intraday action suggested further losses were on the cards.


Monday is nicely set up for some bullish follow through in the Russell 2000, assuming Greece/EU/Germany don't say something to upset the apple cart. Strength in Small Caps will ultimately benefit Large Caps, despite the weak action in Large Caps, the Dow in particular. The S&P, given its position at support, may be the index to play on Monday.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.

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