Bear Traps for Indices
Friday delivered gains which regained real body support across lead indices. Trading volume was light, but given the gains this wasn't too worrisome.
In the case of the Nasdaq, there was a close above the 20-day MA with a relative gain over the S&P. The next target is likely to be the 50-day MA (which is currently trading near February highs)
The S&P was coming from a much lower level than the Nasdaq. It hasn't made it back above any of the key moving averages, but it has recovered real-body support from the January swing low.
The Russell 2000 posted a strong gain which recovered its 20-day MA and will likely be the first index to challenge February swing highs. Of the indices, the MACD was the only one to trigger a 'buy'. Given its current position, it enjoys a relative performance over the Nasdaq and S&P and is the index best positioned to lead the recovery.
You've now read my opinion, next read Douglas' blog.
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