Markets Breakout
After yesterday saw the Russell 2000 finally switch to a net bearish turn in technicals, today saw markets move sharply higher. This generated breakouts for Tech and Large Cap indices.
The S&P enjoyed higher volume accumulation as it cleared the consolidation dating back to the start of December. The gains, while welcome, weren't enough to generate a MACD trigger 'buy'
The Nasdaq cleared resistance of a shorter handle from 2017. It did so with a MACD trigger 'buy' as all of its technicals are net bullish with strong relative out performance.
The Russell 2000 had the best of the action. As the index most exposed to shorting, traders are now on the defensive. The index hasn't yet gone to challenge the 'bull trap', but tomorrow could be the day. Slow stochastics have bounced off mid-line support in what may be later viewed as a buyers pullback. If the Russell 2000 is able to clear resistance it will leave a 'bear trap' - which itself will create its own bullish momentum and return the index to its November rally.
For tomorrow, shorts will be looking to become cover, or at the least adopt a more cautious approach going forward. Longs will be looking to take advantage of any weakness which brings indices back to fib retracement levels across today's intraday range.
You've now read my opinion, next read Douglas' blog.
I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for "fallond".
If you are new to spread betting, here is a guide on position size based on eToro's system.
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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.
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Dr. Declan Fallon is the Senior Market Technician for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.
The S&P enjoyed higher volume accumulation as it cleared the consolidation dating back to the start of December. The gains, while welcome, weren't enough to generate a MACD trigger 'buy'
The Nasdaq cleared resistance of a shorter handle from 2017. It did so with a MACD trigger 'buy' as all of its technicals are net bullish with strong relative out performance.
The Russell 2000 had the best of the action. As the index most exposed to shorting, traders are now on the defensive. The index hasn't yet gone to challenge the 'bull trap', but tomorrow could be the day. Slow stochastics have bounced off mid-line support in what may be later viewed as a buyers pullback. If the Russell 2000 is able to clear resistance it will leave a 'bear trap' - which itself will create its own bullish momentum and return the index to its November rally.
For tomorrow, shorts will be looking to become cover, or at the least adopt a more cautious approach going forward. Longs will be looking to take advantage of any weakness which brings indices back to fib retracement levels across today's intraday range.
You've now read my opinion, next read Douglas' blog.
I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for "fallond".
If you are new to spread betting, here is a guide on position size based on eToro's system.
---
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
Dr. Declan Fallon is the Senior Market Technician for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.
