Last week saw gap downs that took some of the indices to their moving average. Since then, indices have been rallying back to their breakdown gaps, with today marking the end of this process. Where markets go from here is up for debate, but either resistance created by the gap down kicks in, or the gap is negated and markets take this as an opportunity to kick on higher. It's potentially a swing trade, as going sideways is not the usual reaction to this. We need to watch the relative relationship of the indices to their 200-day MAs; at the moment the S&P and Nasdaq are inside the 15% zone, and the Russell 2000 in the 10% zone of historic price extremes (i.e. indices are further above their 200-day MAs than 85-90% of price action dating back to the inception of the indices); if these get into the 5% zone, then sell or take profits. The Russell 2000 ($IWM) finished with a small black candlestick - which is typically bearish. Adding to this are 'sell' triggers i...

The chart that caught my attention this week was the comparison between copper prices and semiconductors. Semiconductors have been on a tear of late, with the weekly chart showing two weeks of solid gains delivering a breakout, and bullish net technicals.

Trump defenders - or Trump himself - will not survive history, but markets gave their opinion, and today was not good for bulls or Trump. What's interesting, is that it's not unfair to say the majority of market influencers lean right, but the lack of a favorable reaction to the rate cut would suggest disquiet, and run contrary to the bullishness markets have demonstrated for most of the summer. But we also have to accept that markets are apolitical, and you can't judge your investment decisions through the lense of being left or right. Small Caps had the worst of today's action. While the headlines will show a net gain, they won't show the nasty "gravestone" doji on higher volume. We have a 'sell' signal in the MACD that runs contrary to the 'buy' in On-Balance-Volume. If we see a gain into today's gravestone spike we will have a good chance of a negation in its bearish implication, but a loss tomorrow will spell trouble.

There wasn't a whole lot of change to indices, so today we will look at some of the other charts. One of the more interesting is the AAII Bullish/Bearish Sentiment Index. Earlier this year, we had the tariff sell off that killed investor sentiment, but what followed is the rally investors are still enjoying the benefits from today. If there is a concern, it's that investor sentiment is growing more bearish, in a manner similar to what we saw at the start of 2022. The chief difference is that in 2022, the S&P sold off for the rest of the year, but this year, markets have continued their advance; will things turn sour quickly?

Solid action for indices with many enjoying higher volume accumulation. The S&P has enjoyed some of the best action since the 2025 lows. Technicals are net positive, but on a weekly time frame there there was a relative shift towards Small Caps (Russell 2000).

Today was the kind of day that makes bulls happy. When you hear of traders beating the market it's thanks to days like today. Indices traded on higher volume accumulation with some able to mark new highs. The Russell 2000 ($WIM) maintained its bullish signal in On-Balance-Volume as the pending reversal in relative performance against the Nasdaq was stalled. Technicals remain net bullish with only On-Balance-Volume the weakest.

Im not going to say a whole lot because there hasn't been a big enough change in indices from the weekend to warrant another post. The Semiconductor Index is working a bullish bounce in technicals, despite doing little with price. There was a return in bullish technicals with CCI, +DI/-DI, Stochastics and Relative Strength all showing 'buy' triggers. Only the MACD remains on a 'sell' trigger, and when it switches, technicals will become net bullish. The Semiconductor Index is playing out a sideways pattern in price. Today's doji will have barely registered on anyone's radar, but with the return above moving averages it only leaves peak highs to break.