Awkward Friday for indices - but looking for weaker finish by end-of-week
Indices had a confusing day of trading on Friday. In traditional candlestick terms the S&P, Nasdaq and Russell 2000 ($IWM) all finished with either bullish 'dragonfly' doji or bullish hammer. The problem is that all of these candlestick appeared off a gap higher from the open instead of a gap lower. The net effect of this is that we are effectively left with a more neutral finish to the week than could have otherwise have been the case.
While the Nasdaq's finish fits with a bullish 'hammer' it also (sort of) engulfed Thursday's trading with its spike low. Technicals remain net bearish and relative performance to the S&P is in the dog house. The one positive is the continued defence of former channel resistance - turned support.
The S&P had not engulfed Thursdays' trading as had the Nasdaq, but it did have the benefit of leaning on declining resistance connecting August and September swing highs, although it would have been helpful if it had also managed to regain 50-day MA support - something it wasn't able to do. While the Nasdaq is net negative for all technicals, the MACD of the S&P is clinging on to an earlier October 'buy' signal, and had manged to cross the bullish zero line. However, a positive Monday would make a big difference.
You've now read my opinion, next read Douglas' blog.
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