While I have no direct evidence of this, it always seems holidays deliver junior trader "feel good" gains, and this July 4th feels like no exception. Indices enjoyed gaps higher without making big gains, enough to keep things under the radar and allow senior traders to enjoy their break in the Hamptons.
The Russell 2000 (IWM) is net bullish with a relative performance gain of Small Caps over Tech Indices. There was no net accumulation in volume - not surprising given the holiday - but things are nicely set up for next week.
The S&P 500 is moving into the rarified air of new all-time highs. There is a sizable gap to support, which means sellers will have a hard time trying to kill the momentum of this rally.
The index is underperforming ralative to the Nasdaq, but it’s not really a problem, and it could prove to be a positive kicker when it starts to outperform peer indices.
The Nasdaq is working a smaller, but still significant, breakout of its own. Volume has declined and it has experienced a relative performance loss against Small Caps after a period of outperformance. Technicals are net bullish and there is little to suggest bears will be able to regain control anytime soon.
Bitcoin continues to work its consolidation. Trading volume has been light since April, and this is typical of consolidation action. But as with indices, it’s set up for further gains.
For next week, look for a continuation of the feel-good rally across indices and Bitcoin. Markets are well placed to continue their advance, and even if sellers take a slice they are unlikely to reverse the strong momentum higher.