If the Russell 2000 is to offer any form of leadership then it has to post gains on Monday as it's right against consolidation resistance. A push to 1,180 should be enough to break the declining channel. Of supporting technicals, only the +DI/-DI has yet to turn positive.
The S&P made a clean break of the 200-day MA with a bull cross between 20-day and 50-day MA. Technicals are in good shape and only trading volume was a little disappointing.
The Nasdaq posted most of its gains in the pre-market. However, market hour's trading volume was close to marking accumulation and Friday's gains gapped the index above its 200-day MA. This left the index firmly inside the trading range established in the first part of the year. Bulls now have a bit of room to work with, leaving shorts - quite literally - high and dry.
The Semiconductor Index continued its good run of form. It was able to post a gain above its 200-day MA, leaving it on course to challenge June highs.
Tomorrow will be about consolidating last week's gains, and building for a challenge of 2015 highs. The hard work of getting past resistance is done, so now it's a question of squeezing shorts and pushing on. If sellers do return watch for distribution volume; sellers will need a strong day if they are to influence events beyond a single day.
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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