Yesterday's gains reversed for S&P and Nasdaq, as Russell 2000 gains
The headlines may have made it look worse than it was for the S&P and Nasdaq, but the gain in the Russell 2000 was important after a week of indecisive action. Volume climbed to register an accumulation day for the Russell 2000, along with a new MACD trigger 'buy' in support of the earlier 'buy' signals in Stochastics and On-Balance-Volume.
The Nasdaq gave up nearly a percentage point, but it remains well above its breakout level. It also continues to outperform relative to the Russell 2000.
The S&P didn't give up as much ground and it remains well ahead of the last peak (resistance). Technicals are in good shape. The index is 14.7% above it 200-day MA, which keeps it in the 5% zone of historic extremes and at a place where a top may emerge.
Look for the Russell 2000 to push its advantage as it looks to reassert its leadership role. It will be important for the S&P and Nasdaq to hold their existing gains so as to prevent unwanted profit taking.
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You've now read my opinion, next read Douglas' blog.
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