Across the board breakouts for indices

The week finished on a high with breakouts in the Russell 2000 ($IWM), S&P and Nasdaq. The Russell 2000 went a step further with a breakout on the weekly time frame too. The break on the weekly time frame for the Russell 2000 is critical as it marks the start of a right-hand-side base after repeated attempts to clear $195 ($IWM) had failed. If there is a concern (across the board) it's that breakout volume was modest.

The Nasdaq kept up with its step-by-step rally, delivering a breakout with new 'buy' triggers in the MACD and On-Balance-Volume, although the former indicator had flatlined so it's not the most effusive 'buy' trigger.

The S&P gained just under 1%, a little less than the Nasdaq, but the breakout was just as valid. The index has a much stronger accumulation trend than the Nasdaq, and with all indices in alignment on breakouts with Small Cap leadership, all indices should continue to perform well.

Heading into next week, we may see some early weakness, and if we do, it will be important we don't see a close below Friday's open. If this was to happen, we would be at risk of a 'bull trap'. Intraday losses, even losses that undercut the breakout are okay, it's how markets finish that's important.

---

Follow Me on Twitter


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

Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more