Monday, August 16, 2021

Stronger bullish action for the Nasdaq and S&P as Russell 2000 suffers again

Sellers tried to put the squeeze on the indices with a large intraday swing lower, but by the close of business those loses were recovered for some of the indices.

The Nasdaq had undercut its 20-day MA with a quick loss, but it recovered to finish with a 'bullish' hammer.  However, as the index is not oversold in momentum it's not a strong bullish candletick. Technicals are mixed with a 'sell' trigger in the MACD and ADX, but bullish On-Balance-Volume and Stochastics.  Selling volume was lighter, so there is no distribution. 

The S&P had flashed a sequence of narrow, tight-range candlesticks up until today, but today offered a wide range hammer which saw buyers step in to claw back intraday losses. It was enough to leave the index at a new all-time high after looking like it was going to be a confirmed day of selling. Ultimately, it proved to be an accumulation day but overall trading volume was light - in line with vacation trading. 

The Russell 2000 gapped below its rising wedge and it remains to be seen if there is a measured move lower down to - and below - trading range support. However, there is a 'sell' trigger in On-Balance-Volume, ADX and relative performance loss to the Nasdaq. 

Markets continue to diverge with gains in the Nasdaq and S&P countered by losses in the Russell 2000.  The latter is more worrying as a move to trading range support would look to be a minium target and this will have an obvious (negative) knock on effect on the S&P and Nasdaq. 

You've now read my opinion, next read Douglas' blog.

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