Swing Lows Take Shape Across Indices

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. 

The S&P continues to honor channel support (for a fourth time).  Buying volume was down on yesterday but it was enough for it to close above its 50-day MA.  Technicals are mixed, but stochastics are above the bullish mid-line. 

The Russell 2000 defended the double bottom in what is now looking like a triple bottom. Technicals are net bearish but the index is outperforming the Nasdaq (but not the S&P).  It shouldn't take much to make it back to a new test of its 50-day MA, but getting past it will be a more difficult task.

Of the three indices, the Nasdaq is perhaps the one to watch here. Normally, I would be looking at the Russell 2000, but this index is still within its trading range, while the Nasdaq has breached its rising channel.  If the Nasdaq is able to make its way back to former channel support - now resistance - it will become a significant test and a potential shorting opportunity. 

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

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Investments are held in a pension fund on a buy-and-hold strategy.

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