Monday, November 08, 2021

Indices take a breather in preparation of breakout support tests.

After last week's strong gain we had a quiet start to the week with indices finishing the day much where they opened. 

The one index which may be blinking a little is the Russell 2000.  The index closed with a bearish black candlestick, but even if this plays as true it will only initiate a breakout retest.  There is plenty of room to absorb some weakness without breaking the bullish thesis. 


The Nasdaq also closed with a small bearish black candlestick, but it occurred inside the prior's day range.  Technicals are positive and the index didn't see an acceleration in its relative loss to its peers. 


The S&P closed with a doji (an inside doji to the prior doji), which can be considered neutral in its current position. Technicals haven't weakened except for an acceleration in the relative loss to the Russell 2000.


We can't read too much into today's action.  All indices have extended themselves beyond their breakout levels but now we have an opportunity to see how they react to selling pressure and if they can successfully defend these newly defined breakouts. 

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

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