It has taken the best part of a two months but it has finally managed to clear resistance and is well placed to finally put an end to the 2021 trading range. Technicals are net positive and relative performance is on the verge of a return to new market leadership.
With options expiration on Friday we got a volume spike which took some of the sting out of Nasdaq and S&P losses - the latter to a lesser degree. In the case of the S&P, Friday's 'spinning top' candlestick marked a neutral finish, but it occurred bang on resistance which after a rally is not the best candlestick to see. This could go either way.
Once the Nasdaq broke through resistance (former support) defined by the July and August swing lows it has managed to hang on to regained support. Technicals are net positive and the index is again outperforming the Russell 2000. It still has some way to go before it challenges the September high and finished today with a small bearish candlestick.
If there was a short play on the move to test former support - turned resistance, then it was quickly undone by today`s buying. Trading volume in the Nasdaq was not particularly heavy, so while it was positive it didn't count as confirmed accumulation. However, there was a return to net bullish technicals, putting an end to the declie begun in September.
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