Friday was a defense by bulls but the frequency of the support test is a concern. The Russell 2000 is looking the most vulnerable as it attempted a (failed) bullish piercing pattern. Friday's buying barely cut into Thursday's selling but the index is outperforming the Nasdaq. but it will need to push from here if it's not to collapse. Either way, I'm not liking Friday's action...
No surprise given the selling which has come before that the nascent rallies now find themselves moving into areas of prior supply. Today's candlesticks are not great but are more neutral in tone than outright bearish.
For the Nasdaq, we had a bearish 'black' candlestick below all key moving averages. Supporting technicals are all bearish and there hasn't been enough of a recovery in relative performance to suggest this bounce can last much longer.
Today effectively confirmed the swing low is in development across indices, but it's still early days if today's buying is to be reflected in a rally. The first challenge is to make it back to the last swing high.
For the Nasdaq, this means mounting a challenge of 16,000 as the 200-day MA has played as a launch point for this swing low. Technicals remain net negative.
Well the Nasdaq wasn't able to break through 16,000 resistance, it's now looking at cutting below 14,900 support. The 200-day MA is nearby at 14,681 and is looking a more likely support test that maintaining current levels.
Not surprisingly, there was an acceleration in the relative loss of the Nasdaq to the S&P with technicals net bearish. Volume is a balance between sellers and buyers and the likelihood is that we have trading range in development.
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