Decision Time Breaks In Bulls Favor For Russell 2000 ($IWM)

So the Trump Bump continues to play out in favor of bulls. Tuesday delivered a clear breakout of the downward channel with only the 50-day MA left to play as resistance. From a technical perspective, there is only stochastics [39,1] left to cross the bullish threshold. Although, the index has switched to underperformance relative to the Nasdaq.

With the Russell 2000 ($IWM) finally clearing resistance it was an easier day for the S&P and Nasdaq. Neither did much beyond their opening gaps, but the S&P is challenging its 'bull trap' on net bullish technicals. Despite this, the index is underperforming the Nasdaq.

The Nasdaq did a little better for peer indices and cleared the psychological 20K mark for a third time. This came with a MACD trigger 'buy' along with a 'buy' in ADX. Volume was a little light, but another upside day would likely bring with it a bull cross in On-Balance-Volume and therefore a new net bullish technical picture.

From a trade perspective, look to the Dow Jones Industrial Average. It finished the day at resistance of former trend support on a narrow range day. Tomorrow will be interesting as near term stochastics are overbought (although intermediate stochastics are bullish, and not overbought). Look for a short attack.

For tomorrow, the likelihood is that there will be some clawback given the sequence of gap-driven candlesticks. However, if there is a downday, but indices manage to stay near highs, then the chance of the week finishing at new all-time highs (for the Nasdaq and S&P) will be quite high.

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

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