Monday, December 20, 2021

Nasdaq Breaks Support as Russell 2000 Defends

The Nasdaq broke channel support but managed to finish Friday above its open price in what could also be considered a support test.  The measured move to the 200-day MA remains in play for the index, but until there is a loss of 14,900 the possibility of a double bottom is also an option. The candlestick finish on Friday wasn't that bullish, so edging in favor of the measured move lower. 

The Russell 2000 did a little better than the Nasdaq as Friday's close pushed into Thursday's sell off.  Technicals are net bearish but there is a general improvent in the MACD, On-Balance-Volume and relative performance to the S&P. 

Surprisingly, the S&P experienced a net loss on Friday - in contrast to the Russell 2000 or the Nasdaq. The index remains well above support of its rising channel and breakout support. It could take another day's loss and still be considered bullish.  The concern is the weakening technical picture with On-Balance-Volume, in particular, showing a nasty 'sell' trigger. 

Friday's action may have brought a temporary reprieve, but with the holiday fast approaching we may not see a whole lot of action as traders perhaps look to an extended break during this latest Covid Christmas. 

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

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