Buyers stewed over the weekend and started Monday with a period of buying across lead inside.  Buying volume was down on yesterday's (and recent buying) and given the Nasdaq gained over 3% it was a little disappointing not to see volume match the large percentage gain, although things were a little better for the S&P.  For the Nasdaq, there was no fresh 'buy' signals, although On-Balance-Volume is on the verge of a new trigger. 

Friday was a good day for bulls and a nice finish to the week.  Best of the action probably belonged to the Nasdaq as it bounced off the 200-day MA. The index closed above Thursday's open in what is shaping up as a week long swing low. Technicals are net bearish with relative performance accelerating away from the index, but if the Nasdaq can build from Friday it will attract buyers and improve the technical picture. 

Monday's buying should have followed with gaps higher and the start of a recovery rally.  Instead, we had no gap, a tentative bounce, and now a move into the spike lows of Monday - rarely a good sign for bulls. The Nasdaq is easing back to its 200-day MA for a second test in less than a week.  A second test over such a short period is rarely a good thing and despite registered accumulation it's hard to see how accelerating technical weakness could deliver a bounce now.

For those with a long hold time frame, buying here is not to bad a thing to be doing.  Those Tik Tok traders looking to steal a profitable trade are unlikely to fare too well as whipsaw becomes a real issue based on the sharp uptick in volatility.   The Nasdaq 100 had a enjoyed a sustained period of low volatility for most of the 2010s, but since breaking from this period of (volatility) consolidation in 2018 it has been steadily rising. Luckily, markets had enjoyed a sustained period of gain despite Covid, but as the virus enters the latter stage of its infectious cycle the 'sell the news' has made an early start, and this creates the volatiltiy we are seeing now.  

Options expiration disguised some of the selling volume, but Friday was still an ugly day for markets.  The Nasdaq wasn't able to stick around its 200-day MA for very long and once that support was lost it became hard for buyers to drum up any enthusiam.  Technicals are net negative and the index is sharply underperforming relative to the S&P.

Today was not a good day for bulls, even if the most recent swing low held as support, the nature of today's candlesticks was bearish with the likelihood for a follow through down particularly high.  In the case of the Nasdaq, there was a confirmed break of the 200-day MA although the index has moved into an oversold condition. The spike low of 14,630 is unlikely to hold but there is an outside chance we could see a new hammer/spike low with Wednesday finishing with a close above 14,630. 

Friday was a defense by bulls but the frequency of the support test is a concern. The Russell 2000 is looking the most vulnerable as it attempted a (failed) bullish piercing pattern. Friday's buying barely cut into Thursday's selling but the index is outperforming the Nasdaq. but it will need to push from here if it's not to collapse. Either way, I'm not liking Friday's action...

No surprise given the selling which has come before that the nascent rallies now find themselves moving into areas of prior supply. Today's candlesticks are not great but are more neutral in tone than outright bearish. For the Nasdaq, we had a bearish 'black' candlestick below all key moving averages. Supporting technicals are all bearish and there hasn't been enough of a recovery in relative performance to suggest this bounce can last much longer.  

Today effectively confirmed the swing low is in development across indices, but it's still early days if today's buying is to be reflected in a rally. The first challenge is to make it back to the last swing high.  For the Nasdaq, this means mounting a challenge of 16,000 as the 200-day MA has played as a launch point for this swing low.  Technicals remain net negative. 

Well the Nasdaq wasn't able to break through 16,000 resistance, it's now looking at cutting below 14,900 support.  The 200-day MA is nearby at 14,681 and is looking a more likely support test that maintaining current levels.  Not surprisingly, there was an acceleration in the relative loss of the Nasdaq to the S&P with technicals net bearish.  Volume is a balance between sellers and buyers and the likelihood is that we have trading range in development.

One step forward, two steps back.  The only consolation to today was that trading volume was down on yesterday's.  The Nasdaq is holding circa 14,900 support whie the S&P was able to find buyers around its 50-day MA - but not before it undercut breakout support. Meanwhile, the Russell 2000 didn't make it past neckline resistance.  Despite the loss of breakout support the S&P has two chances to recover the losses; the first is where the index finished today - at its 50-day MA, the second is channel support - currently around 4,650.  We do have 'sell' triggers in the MACD and On-Balance-Volume, but momentum remains on the bullish side of the midline.

With Christmas behind us, traders made their return but control of the market has not yet been decided. The best of the action came in the Dow Jones Industrial Average as it broke resistance of the potential 'double top' on higher volume accumulation. Technicals are net positive and the index is making a relative gain to its peers. Will this strength feed into the S&P?

While trading volume was down over the holiday period, there were significant technical changes as resistance was challenged and broken across lead indices.  The biggest move came with the S&P as it pushed above 4,725 and managed to retain this key breakout with modest losses over last week. The big question is whether it will be able to hold this breakout once traders return from holidays.  In support of this was a MACD trigger 'buy', an acceleration in trend strength as measured by ADX, and a return to overbought conditions (in momentum) - necessary for a sustained rally. The index is still outperforming the Russell 2000, but it is losing ground to it.  It's an important move and one which could set up a positive quarter - but it needs some volume buying to back it up and we haven't had it yet, as noted by the 'sell' trigger in On-Balance-Volume.