Last week closed with sellers in control and this pessimism was reflected in the buying of the last two days.
The Nasdaq had undercut March lows and had managed a day of accumulated buying yesterday, but today’s neutral doji marked doubts on behalf of buyers. Technicals are net bearish, but there is a slowly improving relative performance for the index which may be reflected in the Nasdaq over the coming days.
The S&P was able to recover support (barely), but I would hardly count it as a ‘bear trap’ yet. On a positive front, there was bullish ‘buy’ trigger in On-Balance-Volume. If this is a bottom – of sorts – then we need to see a confirmed move above 4,300, otherwise price action is just noise.
The Russell 2000 ($IWM) moved deeper beyond support, requiring a larger gain to return itself above support. The index is outperforming peer indices during the course of the April downleg, but it needs to do more to confirm a return above support and mark a ‘bear trap’.
You’ve now read my opinion, next read Douglas’ blog.
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SOURCE: Fallon Financial Commentary – Read entire story here.