End of week gloss marks strong accumulation finish for indices

It was an earlier then expected - but welcome - rally which closed the week out. Indices exhibiting bullish technicals are looking in good shape, even if it's a bit of a slow burn.

The Nasdaq has yet to challenge the December highs, nor its 200-day MA, but the index is accelerating its relative outperformance to the S&P, with on-balance-volume trending higher.  Buying volume registered as accumulation and while it hasn't knocked out last week's swing high, it should do so this week and build on a challenge of 11,500.


The S&P gained its bounce off the 20-day MA, only to finish at its 200-day MA. Despite this, the index was able to register an accumulation day as it held mid-line stochastic support.  It still has work to do to make back lost relative performance against the Russell 2000, but the 'sell' trigger in On-Balance-Volume could be reversed early next week. 


The Russell 2000 is again becoming an index of interest.  Friday's gain came on strong accumulation which included an uptick in On-Balance-Volume but a disapinting downtick in relative performance.  However, unlike the S&P and Nasdaq it's above all key moving averages with a pending 'golden cross' between 50-day MA and 200-day MA. 


The Dow Jones has come back to a support level of December's congestion after challenging highs. As with the aforementoned indices, it registered an accumulation day but technicals have turned more mixed - this could stall a breakout to new highs, taking longer than could have otherwise been expected. With the improvement in the Russell 2000 we could find this index back on the back burner.  However, if you were looking to buy, now is not a bad time. 


It's amazing what one day of good (or bad) trading can do markets. With indices protected by recent swing highs there won't be too many algo systems acting on Friday's action, but Friday was a marker for a more bullish set up.  The Russell 2000 has the best setup up, use the 'golden cross' to measure risk. 

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

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