The S&P continues to out perform the Russell 2000 and today's action was inside yesterday's range in a possible bullish harami cross; a break of today's high of 1,949 would confirm.
The two side-by-side doji in the Nasdaq make for an interesting play tomorrow. It looks a straight coin toss, although the technicals play perhaps in favour of bears. The index looks rich relative to other indices, but rich can get richer. Play a break of the 2-day high/low with a stop on the flip side.
The Russell 2000 did pressure and break yesterday's lows. Shorts may get the most joy in attacking rallies as this looks to be the index struggling most to attract buyers. It's relative under-performance to other indices adds to the malaise.
Another index struggling is the Semiconductor Index. Technicals returned to net bearish with the August low looking the next test.
While I'm positioned short side I'm not convinced the position will last tomorrow. I'll be looking for European indices (DAX in particular) for leads.
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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