Since the last update there has been a bit of back-and-forth for the indices. The Nasdaq had bounced off breakout support yesterday before it quickly gave up those gains. It was a similar story for the S&P, although this index trades well above its key moving averages. The Russell 2000 experienced the lightest loss, although its struggling to clear its handle.
Indices eased back on recent gains, but nothing to raise a concern for the health of the broader rally. It would be too easy to overplay the losses - especially given trading volume was light - so best to let it play out over the coming days.
Friday saw the S&P and Dow Jones Industrials continue to post gains as other indices drifted along in narrow trading.
The S&P is on a ribbon rally of small, steady gains that brings its relationship to the 200-day MA to 16.1%, which is between the 99% to 95% of historic price extremes; this is a rally which is running hot. There is no slowdown in technical strength, or bearish divergences to worry about, and relative performance remains good after an extended period of underperformance - so no reason to not see this rally continue despite its extended nature.
Buyers took advantage of yesterday's S&P light losses to push the index to new highs. Today's buying was enough to register it as a day of accumulation with good relative performance. Shorts have little to work with, which makes it an easy win for buyers and existing longs.
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