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S&P 'Gravestone doji' negated - index rallies continue

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Friday maintained the good form of indices, the S&P did particularly well as it finally cleared the spike high and managed to register an accumulation day by the close of business. Technicals are net positive and the index is accelerating in its relative performance advantage to peer indices. 

Nasdaq Breakout

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After yesterday's struggles it was good to see Tech Indices take on a leadership role.  The Nasdaq enjoyed a clean breakout with a further uptick in realtive performance to the Russell 2000 and S&P.  While I would like to see this gain matched by the Russell 2000, it was a welcome relief to Wednesday's negativity. 

Beware the spike high...

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Monday promised much - Tuesday provided an air of gloom.  The S&P finished the day with a 'gravestone doji' which is ususally a bearish reversal candlestick.  Adding to this is an overbought setup, which strengthens the reversal potential of the candlestick.  If this is to play out then look for a lower close tomorrow, which collectively would also setup a 'bearish evening star'.

The Russell 2000 breaks out in an anticipated end to the 2021 trading range

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It has taken the best part of a two months but it has finally managed to clear resistance and is well placed to finally put an end to the 2021 trading range.  Technicals are net positive and relative performance is on the verge of a return to new market leadership.

Russell 2000 needs to break so as to keep bullish momentum in other markets

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With options expiration on Friday we got a volume spike which took some of the sting out of Nasdaq and S&P losses - the latter to a lesser degree. In the case of the S&P, Friday's 'spinning top' candlestick marked a neutral finish, but it occurred bang on resistance which after a rally is not the best candlestick to see.  This could go either way. 

S&P challenges all-time highs

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Once the Nasdaq broke through resistance (former support) defined by the July and August swing lows it has managed to hang on to regained support. Technicals are net positive and the index is again outperforming the Russell 2000.  It still has some way to go before it challenges the September high and finished today with a small bearish candlestick. 

Nasdaq gains knocks out aggressive shorts

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If there was a short play on the move to test former support - turned resistance, then it was quickly undone by today`s buying.  Trading volume in the Nasdaq was not particularly heavy, so while it was positive it didn't count as confirmed accumulation. However, there was a return to net bullish technicals, putting an end to the declie begun in September.

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