The gains in the Nasdaq counted as a breakout yesterday but volume was light. Today's gain registered as a bearish black candlestick, with the index closing below its open price. Despite the opening loss, it didn't reverse the breakout. If prices can stay above 9,400 it would complete a return to net bullish technicals with a MACD trigger 'buy'.
The S&P enjoyed higher buying volume accumulation, building on yesterday's gain. The rally off the 50-day MA counts as a 'bear trap', which if it plays to form typical of this pattern should see a rally to channel resistance.
The Russell 2000 gained 1.5% but it had fallen out of its channel and has a long way to make it back. Relative performance is still falling off a cliff but the buying in the $IWM did enough to deliver a new 'buy' trigger in On-Balance-Volume.
On a final note, the Semiconductor Index added over 2% as it saw a return to the middle of its rising channel and finished with a close above its 20-day MA.
Tomorrow will be about holding on to the gains of the last two days. I still think this bounce has come a little early but with the Russell 2000 breaking higher, any chance of an A-B-C, zig-zag style correction is looking more unlikely with each passing day. Any big drop tomorrow will only open up for another run at the bullish harami swing low; indeed, a short attack in the opening hour of trading could set up an intermediate term short play, lasting a few days.
You've now read my opinion, next read Douglas' blog.
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