Light Selling
We are not seeing a whole lot from either side of the market, just a mixed sequence of low key buying and selling which so far has edged in bulls favor, but there would be no give aways on the daily reporting - only by looking at the weekly charts would you see the benefits of this action.
For the Nasdaq we are seeing is a general drop in trading volume after a steady build up since early November. Whether this is a sign of things to come remains to be seen. The index is slowly building towards a period of potential relative outperformance, which should help it attract buyers. Other technicals are net bullish with On-Balance-Volume going particularly well despite the recent drop in trading volume.
The S&P has been more modest in its trading volume, although there has been a steady drop off since the start of February, with volume spikes in the past week running in bears favor. However, it too it lining up for a potential outperformance relative to the Russell 2000.
The Russell 2000 has edged in favor of distribution over the last four days. Today's action played out as a bearish engulfing pattern, although rising support was not breached. Technicals are seeing a little weakness with On-Balance-Volume on the verge of a new 'sell' trigger, but otherwise the technical picture remains okay.
You've now read my opinion, next read Douglas' blog.
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