The market is seeing a mix of performances across indexes. Large caps, particularly the S&P 500 and Dow Jones, are approaching all-time highs, delivering an impressive show of strength.
While buying volume for large caps is not deemed as accumulation, these indexes are outperforming their peers, signaling robust potential for further gains.
S&P 500 Daily Chart
The Dow Jones Index is currently in a phase of tight consolidation following its significant gains. While the MACD is on a ‘sell’ trigger, the indicator remains comfortably above the bullish zero line.
Dow Jones Daily Chart
The Russell 2000 index finished with a doji, a signal indicating indecision, which occurred within the prior day’s candlestick – a pattern known as a bullish harami. This pattern suggests a strong bullish sentiment. Although technicals are somewhat bearish with ‘sell’ triggers in the MACD and On-Balance-Volume, the volume rose in confirmed accumulation, indicating a potential upward movement.
Russell 2000 Daily Chart
The Russell 2000 has almost closed the initial breakdown gap that marked the beginning of a period of reduced trading activity. Traditionally, gaps tend to act as either support or resistance. If this remains true, we should expect selling on the closure of the gap.
Nasdaq Daily Chart
Currently, there is potential bullishness for the Russell 2000 index, counterbalanced by the potential bearishness of the Nasdaq. If the Russell 2000 can take the lead – being the most likely index to initiate a move – there is a reduced opportunity for sellers to exert influence in the Nasdaq.
Large caps are currently at a resistance level, but it is a juncture where breakouts appear more likely, further strengthening the bullish outlook.
