Yesterday started with some decent bullish momentum, but indices struggled by the close of business. Each of the lead indices finished with a bearish ’black’ candlestick, so look for some downside follow-through today.
The Russell 2000 (IWM) closed with an accumulative day that drifted back to its 20-day MA after an intraday break. There are ’buy’ signals for the MACD, On-Balance-Volume, and DI/-DI. Although there was some bearish drift in the relative performance of the index to the Nasdaq.
The S&P 500 also finished back at its 20-day MA on higher volume accumulation. Unlike the Russell 2000 ($IWM), there were only ’buy’ signals for the On-Balance-Volume and MACD.
While the Nasdaq had a similar finish as the S&P 500 and Russell 2000, closing on its 20-day MA, but is also near the March swing low. If this rally can continue, it will be the first to take out the March swing low and set up a new sequence of higher highs and higher lows. Oddly enough, technicals were weakest in the Nasdaq compared to the S&P 500 and Russell 2000.
Because of the ’black’ candlesticks, I’m expecting bearish pressure tomorrow. In reality, indices are building out trading ranges following their April swing lows. It’s likely going to take a high volume surge up (or down) to break this stasis. Investors should be buying, traders are likely to struggle.
Best of the action came with Bitcoin as the cryptocurrency cleared recent tight congestion, and surged past its 200-day MA. Volume had eased through March and didn’t pick up on the rally to 92,500, which may weaken the sustainability of this rally. However, this is a definitive shift in the prior bearish trend dominant for 2025.
