While markets registered losses of just over 1%, there was no real damage done to the indices. The Nasdaq was one of the worst hit on the day, but the mini push to a new swing high is still intact; the 20-day MA is the support level to watch. 

There was a strong close to last week with markets finishing at new highs.  The Russell 2000 was a bit of an exception as it closed just a little down on Friday, but not before spiking at a high.  The Russell 2000 ($IWM) did register as a distribution day on Friday, but the net effect was relatively minor compared to previous buying. Technicals are all net positive with relative performance still doing well against the Nasdaq and S&P.  The index is 36% above its 200-day MA, where just 22% is enough to place it in the 99% area of historic price extremes; a move to mean reversion will happen soon.

A big divergence in markets as the Russell 2000 wakes from its slumber to close at a new high while the Nasdaq is busy testing its lows. The Dow Industrials joined the Small Caps party, while the S&P was caught in the middle.  It's an odd juxtaposition given the divergence between the indices, with the Russell 2000 so far extended beyond its 200-day MA. Maybe it's the start of a blowoff top, but there was good volume with today's buying - registering it as confirmed accumulation. 

The first day of the New Year starts with selling on heavier volume distribution.  Today may be the start of something, but one day's selling does not make a crash.  For the Nasdaq, we have the MACD trigger 'sell' but still a bullish cross in relative performance to Small Caps. The selling was looking bad but buyers were able to step in at the 20-day MA. 

So, as we say goodbye to 2020 - and hello to 2021 - we have a new year to consider and hopefully one where Covid19 becomes a less of news item as the year progresses. But for now, Covid19 (and the consequences of Brexit for those in the UK), is all we have to work with. The Nasdaq finished near its highs but did edge a 'sell' trigger in the MACD. Other technicals are net positive with the index improving in relative performance against the Russell 2000.

As Christmas approaches there wasn't a whole lot to add on today's trading. Indices were mostly able to add a little on yesterdays bullish reversals, although most of the games were booked at the open and stayed there for most of the day.  Only Large Caps suffered some weakness, but it was pretty modest.  The Nasdaq managed a new closing high on lighter volume. Technicals remain nest positive, although the index is still underperforming relative to the Russell 2000.

Friday's volume selling spiked on December expiration which will have clouded the intent of the sellers - be it confirmed distribution or mild selling.  With Christmas week next week we can expect trading volume to fall and likely remain low until January.  Buyers were able to recover some of Friday's losses by the close of business for both the S&P and Nasdaq with only the Russell 2000 losing ground. However, no index lost significant ground or broke price support.  Friday's Nasdaq trading intraday range was narrow as technicals remain bullish