The Dow is knocking on the door of a breakout with 16,500 resistance. The concern is the downward trend in On-Balance-Volume, which is holding to distribution since mid-December.
The Russell 2000 held to its 'bear trap' and is nicely positioned for a follow through higher. Look for a test of the 50-day MA this week.
The semiconductor index reversed the continuation breakdown and is well positioned to take advantage of the bullish divergence between the index and its MACD and CCI.
Tomorrow will be about maintaining the gains of last week and not challenging the range of the double bottom.
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 also trade on eToro and can be copied for free.
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