Indices find support on bullish 'hammers'
Bulls made decent intraday recoveries to close near highs on Friday - registering bullish 'hammer' candlesticks across the indices. These will offer a good launch point for next week.
The Nasdaq closed on higher volume accumulation as it finished with a bullish hammer off the early January swing low. Technicals are all net bearish, making the likelihood for a move into Friday's spike low relatively high - although I would be look for a more bullish move on Monday.
The S&P staged a recovery to close above its converged 20-day and 50-day MA, but not before there was a close below the bullish mid-lime in stochastics. Typically, this would mark a shift from bullish to bearish, but relative performance ticked up against the Russell 2000, which offers an opportunity for buyers from Friday to mount a challenge of the February swing high. Should Monday start brightly, then the chance for a successful test of the mid-line stochastics increases (significantly reducing the prospect for a bear market in this index).You've now read my opinion, next read Douglas' blog.
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