So with markets threatening support they instead gap higher and post further gains.  Today has probably done enough to see markets post new all-time highs while shorts are left with little to work with. The S&P gapped higher with technicals net bullish. Volume was a little disappointing (given the degree of gain) but all of this leaves markets ready for new highs.

The coiling setup from last week unwound itself with a move lower; whether markets have blinked and are ready for further losses or if this is just some 'bear trap' remains to be seen. The key test will be whether support from long established rising price channels will hold if such losses continue. The S&P only posted a small loss and some may consider Friday's action a shift in the coil position (use the 2-day high/low to define the trade and stop). However, the rising channel is very close and is in close proximity to the 20-day and 50-day MA.

After Tuesday's sell off markets have traded into tight coils (inside days) which are traditionally viewed as swing trade opportunities; buy break of high/stop on reverse side + vice versa for a short. The S&P is sitting just above its converging 20-day and 50-day MAs and rising channel support. Technicals are still on the bullish side so I would look for an upside breakout. The Nasdaq has a better coiling setup; today's small doji is an inside day of an inside day. The index has done well to hold above support and is very close to pushing above the 52-week high of 6,460. Technicals are also well placed with plenty of room before they become overbought. Favoured upside. The Russell 2000 hasn't followed the coiling action of other indices, but it is shaping a good pullback which will offer bulls a buying opportunity if it can tag its fast rising 200-day MA. The Dow may be the index to offer shorts something. There was a small loss which accounted for a f

Friday's tight action plus a long weekend of North Korea news left traders skittish and wanting out. However, there wasn't a significant break of support to suggest a rout is imminent but further losses need to be watched. The S&P is resting on rising support but the nature of today's candlestick is not one to suggest tomorrow won't see some follow through lower. The question is whether it will have enough to return above support by the close of business.