Friday's action looks good on paper, but trading ranges remain

A healthy close to Friday's action saw confirmed accumuation across lead indices, but not all indices were able to escape the grasp of their trading ranges.  Best of the indices was the Dow Jones Industrials Average ($INDU).  It gained over 2% with a new ADX (trend) 'buy' trigger on higher volume accumulation, with new 'buy' triggers in the MACD and On-Balance-Volume in the works.  The only caveat is that momentum (slow stochastics) are in a bit of a no-mans land - I would want to see this cross the mid-line to restore bullish momentum. The Dow Jones is in the index best placed to drive new all-time highs and take other indices with it. 


The other index which could mount a rally from here is the Russell 2000 ($IWM). It too closed with a move outside of its trading range, on higher volume accumulation, supported by a new MACD trigger 'buy' and ADX trend 'buy'.  The index is outperforming peer indices and is offering a trading opportuntity; risk:reward can be measured from a loss of $170.34 ($IWM) with upside targets of the 200-day MA and $188 - resistance from November.

Where things go a little sour is in the Nasdaq. Yes, the index recorded a +2.5% gain on higher volume, but this wasn't enough to take the index out of its range and is still pegged by 20-day MA resistance. There was an ADX (trend) 'buy' signal and it's close to a MACD 'buy', but really, we need to see a shift in the On-Balance-Volume trend if a meaningful rally can come out of here. 

The S&P is in a similar position to the Nasdaq, with a gain that hasn't cleared resistance and technicals still net negative, it has much work to do. The S&P did manage to close above its 20-day and 50-day MAs, but it needs more early week if there is a chance of gaining some momentum off Friday's efforts. 


For tomorrow, we will want to see a positive start to the week, defending Friday's buying - because losses will only keep indices stuck in the mire and threaten the range breakouts for the Dow Jones Industrial Average and Russell 2000. 

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

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