Market Breather

After two days of gain delivering broad breakouts, today saw markets stall a little as those gains were digested. Despite this, the S&P was still able to offer a MACD trigger 'buy'.  Relative performance also got a little uptick against the Russell 2000. With technicals all in the green any additional weakness will likely be viewed as a pullback buying opportuniy

The Nasdaq experienced a bearish cloud cover, but not enough to suggest bears will get some follow through tomorrow. Selling volume was down on yesterday, so no real encouragement for longs to sell or shorts to become more aggressive. Those shorts who are aggressive may look to attack with short stops placed just above Thursday's high (5,670).

The Russell 2000 cam closest to delivering the two-bar reversal I talked about yesterday, but in the end it couldn't do it. The consolidation breakout is still intact, despite failed to (as yet) negate the January 'bull trap'

For tomorrow, longs will want to see some kick on higher. Shorts need today's weakness to expand - particularly for the Russell 2000.

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

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