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Interesting divergence at play in markets. Indices attempted to recover Thursday’s losses to varying degress of success, but Bitcoin was excluded from this party.
The weakest index was the Russell 2000, but Friday’s buying surge has pushed it towards a relative performance advantage against peer Nasdaq and S&P 500 indices. Technicals are still net negative and the index still trades below support, but Friday’s buying registered as accumulation. The real test won’t come until it hits declining resistance.
The S&P 500 staged its rally at support, but didn’t enjoy the same percentage gain as the Russell 2000. The bearish red candlestick still dominates, but it was enough to see a new ’buy’ trigger for On-Balance-Volume. The measured move target is still in play, but it would take a move above 6,900 to negate. Until then, action between 6,550 and 6,900 is really just noise.
The Nasdaq may be the more interesting play for Monday. Friday’s finish was classified as a neutral "spinning top", at converged support of rising trendline, and October swing lows. The S&P 500 and Russell 2000 suggest they will go higher on Monday, but if that doesn’t happen, then look to the Nasdaq to lead lower - and if that happens - it could get ugly. Another interesting aside, there was no accumulation volume to Friday’s trading. Watch it for leads. Bulls won’t start feeling comfortable until the index returns above 23K.
The one asset not to blink in its downward rout was Bitcoin. Thursday’s volume looks like capitulation on a bullish hammer. Friday’s easement into the spike might offer a nice reversal trade (buying) opportunity, but it’s unlikely to be a trade that will last very long - maybe up to the 20-day MA at best. If this was to happen it would likely be good news for the Nasdaq.
The Semiconductor Index is hanging on to the October swing low. The spike low shows there is buying demand. The problem is, if this spike low is undercut, there is not much alternative support to lean on.
For Monday, we will likely see a fresh attempt at the bounce. The original ones initiated at 50-day MAs quickly failed. This next one will probably be a last chance before 200-day MAs beckon.