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Minimum Gains Give Bulls Reason For Optimism

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Traders had a weekend to stew over Friday's losses and a weak open on global markets could have set a more negative tone. However, this proved not to be the case.  The S&P staged a small rally from its 20-day MA. The rally hasn't yet undone the 'sell' trigger in the MACD but the sequence over the last five days has mapped a consolidation handle which has the potential to challenge and get past 3,200. 

Bearish finish to week

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Bulls weren't able to close out the week on a high as Friday's candlestick was a mix of a bearish engulfing pattern or black candlestick (lower close to open, but close above prior day's close). In the case of the Nasdaq, the gap closed but the 'bull trap' remains unchallenged.  The Nasdaq closed with a 'bearish' black candlestick on higher volume. The MACD trigger 'sell' remains but other technicals are positive. 

Gains Stall as Thursday's Breakdown Gap Hold Market Advance

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The S&P experienced a narrow loss as it traded inside yesterday's doji, which was within Thursday's gap down. The MACD is still on a 'sell' trigger but it returned to a relative advantage against the Russell 2000, which would suggest money flowing back to defensive issues - although trading volume was light.

Buyers Keep The Pressure Up

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Friday's defensive action was followed by Monday's buying, with many indices defending 20-day MA support. The profit taking from Thursday is still in the mix but the panic selling from February hasn't materialized. Indices finished with possible bullish engulfing patterns, but the lack of oversold conditions weakens the signal.  The S&P didn't reverse the 'sell' triggers in the MACD and ADX and left a new underperformance signal relative to the Russell 2000. 

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