The Nasdaq 100 built on its breakout on respectable volume. The breakout probably hasn't enough wiggle room to protect itself from a days worth of selling, but there is a substantial gap to protect which will offer bulls something better to work with.
Best of the price gains were in the Dow Jones Industrial average. It's still has room to run to reach supply marked by all-time highs. What's lacking is a decline of substance to test the resolve of weak hands holding their positions.
Small Caps also had a good day as they looked to build on a nascent swing low. Again, value buyers will probably find the most long term joy here. Relative performance continues to improve, although it has yet to out perform other indices.
The S&P experienced the smallest gain, but it hasn't yet approached resistance. Best of the action was the reversal in the On-Balance-Volume 'sell' trigger.
As bulls maintained control it may be best to focus on the index offering the best value, the Russell 2000. If you are searching for a shorting opportunity, look for a 'bull trap' in the Nasdaq 100, but be prepared for bulls to step in once it approaches the breakout gap.
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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