Channel resistance comes into play for S&P and Nasdaq

Including channel resistance in charts can be a bit of a mixed blessing. On one hand, it gives an indication as to when sellers can be expected to make an appearance in a rally. On the other, it can force you out of a position right before a rally accelerates.

The S&P is underperforming relative to the Russell 2000 ($IWM), and yesterday's doji made a picture perfect tag of channel resistance, that delivered with selling today.  If one was to look where buyers might come back, the 20-day MA is looking a good place to start; a bounce here would put a squeeze for a channel resistance breakout and an acceleration of the current rally. 

The Nasdaq is in a similar predictament to the S&P, working off the 20-day MA as it looks to challenge for a channel resistance breakout.  Technicals are net bullish, but the index has started to underperform relative to the S&P. 

The Russell 2000 ($IWM) hasn't got the maturity in the rally that the S&P and Nasdaq enjoys, so today's selling hasn't honored the nascent channel I have drawn.  Having said that, I'm far more interested in seeing $189 breakout support hold than the current channel. 

Blog traffic is well down on my normal baseline traffic, reflecting the large number of people enjoying vacation time in a (relatively) Covid (remember Covid) free summer.  Given that, I would not be expecting any major changes in the indices until post-Labor day in September. 

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

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