Friday maintained the good form of indices, the S&P did particularly well as it finally cleared the spike high and managed to register an accumulation day by the close of business. Technicals are net positive and the index is accelerating in its relative performance advantage to peer indices. 

After yesterday's struggles it was good to see Tech Indices take on a leadership role.  The Nasdaq enjoyed a clean breakout with a further uptick in realtive performance to the Russell 2000 and S&P.  While I would like to see this gain matched by the Russell 2000, it was a welcome relief to Wednesday's negativity. 

Monday promised much - Tuesday provided an air of gloom.  The S&P finished the day with a 'gravestone doji' which is ususally a bearish reversal candlestick.  Adding to this is an overbought setup, which strengthens the reversal potential of the candlestick.  If this is to play out then look for a lower close tomorrow, which collectively would also setup a 'bearish evening star'.

It has taken the best part of a two months but it has finally managed to clear resistance and is well placed to finally put an end to the 2021 trading range.  Technicals are net positive and relative performance is on the verge of a return to new market leadership.

With options expiration on Friday we got a volume spike which took some of the sting out of Nasdaq and S&P losses - the latter to a lesser degree. In the case of the S&P, Friday's 'spinning top' candlestick marked a neutral finish, but it occurred bang on resistance which after a rally is not the best candlestick to see.  This could go either way. 

Once the Nasdaq broke through resistance (former support) defined by the July and August swing lows it has managed to hang on to regained support. Technicals are net positive and the index is again outperforming the Russell 2000.  It still has some way to go before it challenges the September high and finished today with a small bearish candlestick. 

If there was a short play on the move to test former support - turned resistance, then it was quickly undone by today`s buying.  Trading volume in the Nasdaq was not particularly heavy, so while it was positive it didn't count as confirmed accumulation. However, there was a return to net bullish technicals, putting an end to the declie begun in September.

The week finished with markets in a number of difference scenarios.  In the case of the Nasdaq, the rally has returned to former 3-month support - now resistance.  Volume climbed to reigster as confirmed distribution.  It came on a back of a MACD trigger 'buy' and an On-Balance-Volume 'buy' trigger.

While markets may be feeling the pinch of the gap fill from the swing low rally, we have a narrowing of the intraday range in an attempt to confirm support from the gaps.  In the case of the Nasdaq, we have the gap fill on declining volume which is a point of optimism that what we have is a valid swing low. Technicals are net negative and relative performance is not improving enough to suggest we may have a real swing low, but take things one step at a time. 

In candlestick terms, markets finished Friday with a series of bearish engulfing patterns against Thursday's 'real body' finishes. It did put a bit of a dampner on Thursday's bounce although the extent of the losses were relatively minor. Watch for a test of the gap early next week.  Aggressive traders could 'buy' the test and set a stop on a loss of the swing low at 14,100, although a close below the gap would probably offer enough reason to sell before the stop. 

Yesterday's gain marked the start of a potential swing low but there wasn't much momentum to the bounce. In the case of the Nasdaq we had a 'gravestone doji'.  While this candlestick did not occur at a swing high or on overbought momentum, it's not one to inspire confidence on day 1 of the bounce. Technicals are firmly net negative, so expectation is for a downward move tomorrow.

Today's buying was able to erase much of yesterday's losses, although trading volume was below that of Monday. Given the declines in lead indices, what happened today has the potential to act as a swing low - it's just whether nearby 200-day MAs would not prove to be a better point for buyers to come in to support the indices.   The Nasdaq rallied from a prior support area - one which also corresponded to the July swing low. Technicals are net negative with a big swing against it when it comes to relative performance against the Russell 2000. 

Friday was an first attempt by bulls to build a swing low since peaking in early September. Lead indices finished with bullish candlesticks on oversold momentum indicators.  Volume was down on previous selling, so any follow through will need some confirmed accumulation - but Friday was a good start. The Nasdaq finished with a bullish hammer and is well placed for a follow through higher on Monday.  The key negative is the relative performance weakness of the index to the Russell 2000 and the fact this index is a long way from testing its 200-day MA.