Rallies Continue Across Markets
After yesterday's brief pause, today was a return to normal service (for bulls).
The Nasdaq pushed through its 50-day MA, although buying volume did not register as accumulation. However, On-Balance-Volume is building off a 'buy' territory. In addition to getting past its 50-day MA it also took out the March swing high. The index is outperforming the S&P as part of this move.
The S&P may be losing relative ground to the Nasdaq, but it did manage to close above its 200-day MA. There should be enough to see it start to build the right-hand-side of a new base. There should be good support around 4,300 should sellers return.
The Russell 2000 is nicely positioned to break past resistance and start forming the right-hand-side of its base. Despite the sharp reversal in relative performance - against the Nasdaq in particular - it does enjoy net bullish technical strength. All the index needs is some buying volume. Watch for such a breakout from this base which will be a good buying opportunity.
The indices are all offering bulls something to work with. Short covering will have driven the early bounce, but long term buyers will control the next phase of the rally. The Russell 2000 still looks to be the best value of the indices.
You've now read my opinion, next read Douglas' blog.
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