Futures rise; delayed U.S. CPI ahead; Ford earnings - what’s moving markets
After closing the breakdown gap, indices have retained pressure on the gap and refused to swing lower, as would be typical in such tests. So while we haven’t seen much net change over the past few days, expectations would be for the next move to be higher. Backing that has been an uptick in buying volume.
For the Russell 2000 (IWM), we have a return to an On-Balance-Volume ’buy’ signal ,although the MACD trigger is stuck on a ’sell’. Other indicators are positive and the index is holding 20-day MA support.
The S&P 500 did manage to close on a new high as technicals returned net bullish. While the index has steadily underperformed against the Nasdaq, it has enjoyed a period of consistent gains.
The Nasdaq wasn’t quite able to match the S&P 500 on new highs, but is at least recovering some of the ground lost relative to the Russell 2000 ($IWM). Technicals are not net bullish as the MACD retains a ’sell’ signal, although this signal is unlikely to stay like this for much longer.
Finally, Bitcoin ($BTCUSD) received a welcome 3%+ boost on the day, enough to see it form a double bottom at a support level. Next step is to challenge the ’bull trap’, but a modest measured move target of $128K is in play for the cryptocurrency pair.
For the rest of the week, we will want to see indices move to challenge August highs as far as they can. This has already happened for the S&P 500, and soon for the Nasdaq, but moving indices into clear air will help offset the next downward leg in this traditional seasonal ’sell off’ phase. Remember, indices are in ’profit take’ territory, so some form of reset relative to their 200-day MA is likely in the weeks ahead.