Buyers undo last two days of selling
Today wasn't packing much volume, but buyers were able to recover the last two days of losses as the rally off May lows continues. I'm liking the action in the indices even if the tone in the world of social media remains negative.
The Nasdaq rallied off breakout support with an acceleration in the MACD trigger and a new 'buy' trigger in relative performance against the S&P.
The S&P is on the verge of making a secondary breakout of declining resistance connecting the March-April swing highs. Technicals are not as strong in the Nasdaq, but On-Balance-Volume is close to a new 'buy' trigger as is Stochastics momentum.
The Russell 2000 has also worked itself off breakout support, helped by a new 'buy' trigger in On-Balance-Volume to go with the long standing MACD 'buy' trigger. Despite this, the index is losing relative ground to peer indice but is not yet underperforming.
Investors should be pleased with current action, particularly if they bought during the May dip. The Russell 2000 has managed to make its way back inside the prior trading range from February-April with the S&P next in line to do likewise. At the very least, the current rally will be squeezing shorts and things should picup in the pace if they can get past the small consolidation which occurred at the end of April for a couple of weeks.
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.
