Sunday, January 10, 2021

Good Days Continue

There was a strong close to last week with markets finishing at new highs.  The Russell 2000 was a bit of an exception as it closed just a little down on Friday, but not before spiking at a high. 

The Russell 2000 ($IWM) did register as a distribution day on Friday, but the net effect was relatively minor compared to previous buying. Technicals are all net positive with relative performance still doing well against the Nasdaq and S&P.  The index is 36% above its 200-day MA, where just 22% is enough to place it in the 99% area of historic price extremes; a move to mean reversion will happen soon.

The Nasdaq recorded some of its highest (buying) volume on Friday as it closed at its high. This index sits at 23.8% above its 200-day MA which is only just above its 95% area of historic extreme price action. The MACD is still on a 'sell' trigger but is on the verge of a new 'buy' trigger. Things remain positive - it would take an undercut of the swing low at the 20-day MA from the start of January to suggest otherwise. 


The S&P also finished at a new high with the benefit of net bullish technicals - only relative performance is down against Small Caps. The index is riding along trending support also marked by its 20-day MA. 


The Semiconductor Index had a bright start on Friday but found itself closing a little lower by end-of-business Friday. The current move had accelerated above the prior channel and in its current guise is shaping up as a possible bearish wedge, but this won't be confirmed (or negated) until there is a break of support (or resistance).

Traders have returned markets to a positive alignment after the initial loss. It's going to take more than one or two days of selling to change that, so for now, markets (and positions) are a hold. 


You've now read my opinion, next read Douglas' blog.

Share on StockTwits

---

Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.

Follow Me on Twitter


Investments are held in a pension fund on a buy-and-hold strategy.

.

 
f9229fcfd1b1390be00cfccc86c90349c93a4179bf4227457c