The NASDAQ had undercut its 20-day MA with a quick loss, but it recovered to finish with a ‘bullish’ hammer. However, as the index is not oversold in momentum it’s not a strong bullish candletick. Technicals are mixed with a ‘sell’ trigger in the MACD and ADX, but bullish On-Balance-Volume and Stochastics. Selling volume was lighter, so there is no distribution.
The S&P had flashed a sequence of narrow, tight-range candlesticks up until yesterday, but offered a wide range hammer on Monday which saw buyers step in to claw back intraday losses. It was enough to leave the index at a new all-time high after looking like it was going to be a confirmed day of selling.
Ultimately, it proved to be an accumulation day but overall trading volume was light—in line with vacation trading.
The Russell 2000 (via IWM) gapped below its rising wedge and it remains to be seen if there is a measured move lower down to—and below— trading range support. However, there is a ‘sell’ trigger in On-Balance-Volume, ADX and relative performance loss to the NASDAQ.
Markets continue to diverge with gains in the NASDAQ and S&P countered by losses in the Russell 2000. The latter is more worrying as a move to trading range support would look to be a minium target and this will have an obvious (negative) knock on effect on the S&P and NASDAQ.