Friday's losses gave back some of the early week gains, but losses weren't enough to derail the bullishness on the week. The strongest index was the Russell 2000 ($IWM). It started last week pressuring $252 resistance, managed to break mid-week, but got caught up in the Friday sell-off in Semiconductors. Technicals are net bullish with momentum in overbought territory - a key driver for breakouts, and Friday's loss didn't weaken that. For Monday, watch for a spike low below $252, where anything sub-$250 might be an opportunity to grab a long position for an upcoming Santa rally.

Indices are making their way higher, with the Dow Jones Industrial Average making a clean break of resistance on modest volume. The heavy volume gains came yesterday for this index with technicals net bullish. The Dow breakout looks good, but the weekly chart points to resistance. The index could run steadily higher along this resistance line, but a breakout would accelerate the advance.

The volume wasn't great, but the Russell 2000 ($IWM) is again challenging $252 resistance as sellers seemed reluctant to take profits. We may see volume if $252 is breached, but it's got to get there. The other beneficiary was Bitcoin ($BTCUSD), it was struggling a little but is now challenging the last swing high. The Russell 2000 ($IWM) has returned to an overbought state with the MACD above the bullish zero line. The index has outperforming the Nasdaq since bouncing off November lows. Breakouts come from an overbought state and the technical picture now is better than it was in mid-October, the last time it was challenging $252s.

There wasn't a whole lot of action in markets on Friday, but the breakout from the swing low in Bitcoin drifted below breakout support, but not enough to suggest it's done. The breakout failure needs to be watched because it will impact confidence in the Nasdaq and Semiconductor Index. The Nasdaq didn't post a big gain on Friday, but it helped build on the breakout of declining resistance. Volume rose in confirmed accumulation as the MACD trigger line returned above the bullish zero line (although the MACD trigger 'buy' occurred below the zero line, so it's building off a weak buy signal). Technicals are net bullish. The index would benefit from a solid white candlestick; existing shorts have no wiggle room and would be key contributors to this buying. Also, because of this buying, we are again in the 15% of historic price extremes relative to its 200-day MA (dating back to 1971). The S&P has been matching the Nasdaq, but Friday's fini...

The Russell 2000 ($IWM) has been the index to make all the running and today finally saw some modest accumulation. The index is well set to breakout, but it's also 14% above its 200-day MA, which puts it above 90% of historic price action dating back to 1987; if it gets to $258.25 it will be above 95% of historic price action, and at $276.76 it's 99%. The last time the index did that was April 2021...

Trading volume was very light, so it's unlikely the "Big Guns" returned to their desks. Given that, we didn't see a whole lot of action in the indices despite clickbait headlines. However, since my last post, we have seen resistance breakouts in the Russell 2000 ($IWM), S&P ($SPX) and Nasdaq ($COMPQ), but none are near challenging highs. However, the Russell 2000 and S&P have both returned to a net bullish technical picture. I would want to see what kind of action came with volume before we get a better idea of what comes next.

I shall open with this post by J.C. Parets , who offers a more bullish outlook for markets based on Dow Theory. I would be more cautious, as while buyers have controlled markets over the past four days, all that has done is push indices back into prior trading ranges. We are also in the Thanksgiving period, where volumes fall and junior traders control the desks. The real business returns on Monday. In the case of Dow Theory, the context of the improvement looks to be tied to the relative relationship between the Dow Transports and the Dow Industrials and a potential dead-cat bounce off the test of the 2020 low. A rise in this relationship should be bullish for markets, but this relationship has been in freefall since 2023 as Transports struggled to match the gains of the Dow Industral average. I'm not sure we have a confirmed breakout in the Transports, and momentum (red circle) has remained in the bearish camp despite the rally in Transports. A confirmed breakout in the Trasnp...

Interesting divergence at play in markets. Indices attempted to recover Thursday's losses to varying degress of success, but Bitcoin was excluded from this party. The weakest index was the Russell 2000, but Friday's buying surge has pushed it towards a relative performance advantage against peer Nasdaq and S&P indices. Technicals are still net negative and the index still trades below support, but Friday's buying registered as accumulation. The real test won't come until it hits declining resistance.

The pre-market optimism didn't last long, but when markets are coming off an extended high it's hard for buyers to return there, even off the back of 'good news'. The Russell 2000 ($IWM) opened bang on resistance at $237, and then it was all down from there. Volume surged in confirmed distribution, leaving the 200-day MA as the next logical support level.

The early November bounce triggered from tests of 50-day MAs is starting to fade. Many indices are actually trading below the start of that bounce, leaving a large area of overhead supply. While indices are struggling below the band of September-November trading, it will leave a large area of overhead supply when buyers make their return. The Russell 2000 ($IWM) finished with an accumulation day that returned On-Balance-Volumme back to a 'buy' signal after turning net bearish yesterday. Watch for a test of converged resistance of the declining trendline and $237 resistance.

The picture perfect bounce off 50-day MAs is now encountering the reality of doubtful stock holders. The Russell 2000 ($IWM) is important in this regard because Small Caps drive market leadership, and we are not seeing this as relative performance to peer indices continues to deterioriate. The Russell 2000 has returned to a net bearish technical picture, but more importantly, the index has broken the bullish rising trendline. It hasn't yet undercut the lows of the trendline test, but today's solid red candlestick on confirmed distribution is one opening up for a test of the 200-day MA.

We are seeing a technical bounce at moving average support, but how its evolving is subject to intrepration. On the bullish side, we have the Dow Industrial Average making a new closing high (but not absolute high), while bears have staged an aggressive attack against Bitcoin at its 20-day MA. It's not great that tech-bro loving Bitcoin is taking hit on what looked to be a workable low, and its left to defensive (old-timer) Dow Industrials to lead the bullish charge. The one to watch is Bitcoin. A 3% loss on the day is not great, particularly for an asset that has acted all "grown up" since the days of its wild swings. It was notable it reversed from its 20-day MA in what looked like an algo-driven short attack. If it loses psychological support of $100K, then it will likely take tech and semiconductor indices down with it. The lack of Tech leadership from the likes of Elon Musk, Mark Zukerberg and now, Bill Gates, just shows how money can't buy smarts. Unfortunat...

If bulls are calling the shots then I will be expecting next week to deliver a solid bounce as lead indices enjoyed strong accumulation, at 50-day MAs, on bullish candlesticks; a strong trifecta to work off. The Russell 2000 ($IWM) is additionally showing support at converged trendline and the low of the early October big red candlestick. Technicals are net negative, although stochastics aren't fully oversold, which might be the weakest thing you can say about a bounce.

There has been a bit of discussion around blow out tops and the Nasdaq is doing a good impression of one (as is the Semiconductor Index). While we can look at the gap-run over the past few days, we can also look at the relationship of the index to its 200-day MA. In the case of the Nasdaq, it sits 20.4% above its 200-day MA, which only puts it in the 10% zone of extreme historic price action; at 21.4% it will be in the 5% zone and 28.9% sticks it into the 1% zone. The 1% zone is a screaming sell, but the 5% zone, last seen in January 2021, is another. For the record, the January 2021 extension wasn't the absolute high - the index added another 10% before the year was out - but then it gave up 37% from that high. None of this is rocket science, but we need to be aware this run is coming to an end sooner rather than later.

Markets remain bullish, but there are still warning signs things are still a little hot. In the case of the Russell 2000 ($IWM), the index closed with a 'black' candlestick that failed to challenge the $252.77 high (that itself was a spike high). Today's volume registered as accumulation, although overall volume was lighter. On-Balance-Volume and +DI/-DI generated new 'buy' signals, with the MACD about to return to a new 'buy' signal.

Trading volume is telling a truer story than price; gains on lower volume, losses on higher volume. The Russell 2000 ($IWM) posted a loss on higher volume distribution. Today's loss came with a new 'sell' trigger in On-Balance-Volume and a bearish cross in +DI/-DI. The large red candlestick from last week is calling, and an undercut of the 50-day MA is now looking like the next move for the index.

Bulls are doing a little better than I expected with the best of the action coming from Bitcoin. The false breakout at the beginning of October delivered the reversal back to former trading range support, as is often the case in such scenarios, before the spiked low and rally off converged 200-day MA and trading range support. Technicals are strongly net bearish, so this bounce will need to do more if it's to fix the weak technical picture.

The Russell 2000 ($IWM) had done well to reverse its first big red candlestick in months on a solid day of "value" buying, but struggled to build on it. Now, with bad news sweeping the regional banking sector - leading to another sizable red (selling) candlestick on confirmed distribution - it's hard to see buyers coming in for a second bite. In percentage terms, markets are trading above summer levels, so there isn't too much downside to take what you can now (across all asset classes), and wait it out (until the next dip below 200-day MAs).

A real mixed bag for markets. All indices were hit hard by Friday's Trump Tariff Special, but Small Caps ($IWM) are the only one trying to make a come back. Volume rose in confirmed accumulation, but it was below the volume of Friday. Technicals are mixed, but there was a surge in the relative performance of the index over its peers.

It has been a while since we have seen the kind of one day selling markets experienced on Friday, again driven by Trump's idiosyncrancies. Where he might gain a win in Gaza, he undos with rumors of tariffs, with a government shutdown running in the background that offers little in the way of an exit given his penchant for layoffs of Federal workers. One day of selling doesn't kill a rally, but it has put a big dent in the confidence of the rally. The Russell 2000 ($IWM) sliced through its 20-day MA and is on course to test its 50-day MA and rising trendline support. A break of this line would be more terminal for the current bullish run, and open up for a test of the 200-day MA. I would expect some form of bounce on this test, the question will be, how much. Technically, we have a 'sell' in the ADX, along with the earlier MACD 'sell'.