Trump’s machinations cast a shadow on the market, but yesterday’s gap rally would have marked a very bullish reversal *if* this reversal occurred from an oversold market state, but this is not the case here. However, it’s still a positive response to the various moving average tests.
The S&P 500 did likewise, but managed to work the bounce off support off the March swing high and converged 20-day and 200-day MA. It’s well on it was way to a challenge of the 6,100 ’bull trap’ off the back of excellent technical strength; note the strong upward trend in the MACD and On-Balance-Volume.
The bounce in the Russell 2000 (IWM) was launched from the 20-day MA on higher volume accumulation. Technicals are net positive, but overall trading volume remains down on the selling that came before. The index is also sharply underperforming relative to the Nasdaq. However, I’m still looking for a move above $210.
The Nasdaq also posted strong gains as the 20-day MA works towards a bullish cross of its 200-day MA. Like the S&P 500, it boasts a strong trend in the MACD and On-Balance-Volume. The February high is well within range and offers an excellent swing trade opportunity.
For an asset that loves to be volatile, Bitcoin has been rallying within a well-contained rising channel, breaking to new all-time highs in the process. The MACD is slowing and is in the process of shifting negative, but other technicals are positive.
While yesterday’s action fits with a reversal, we haven’t seen enough of a drop to suggest a downward trend was in effect. Given that, we are still working the rally off April’s lows without any meaningful retest of those lows.