The end result was mixed as bulls were unable to add to markets off the open but the likely short fade never materialized – which is good.
Trump’s overnight deal with China was going to cause a gap higher in the market. The challenge was whether this gap would be faded by shorts or if bulls would be able to push it higher. The end result was mixed as bulls were unable to add to markets off the open but the likely short fade never materialized – which is good.
The S&P (NYSEARCA:SPY) tagged resistance from the October and November swing highs as it finished the day with a neutral doji. Short term (buyers) will take profits here and aggressive shorts may try to attack the bounce but long-term investors can hold for another move lower before adding.
The Nasdaq (NYSEARCA:QQQ) was able to clear Oct-Nov resistance, albeit on a ‘black’ candlestick – which is not the most bullish of setups. However, it’s good news for those looking for similar moves in other indices. Volume climbed in accumulation – another positive sign. And there was an upside tick in relative performance against the S&P. If there is to be some follow through upside then this is the index to watch.
The Russell 2000(NYSEARCA:IWM), as the underperforming index, had a smaller gap open but it was able to add to the early gap and close with a solid white candlestick. The index is still underperforming against Tech indices and it hasn’t yet reached Oct-Nov swing high resistance. However, this looks likely tomorrow. Technicals remain mostly on the bearish side.
The Nasdaq 100 tagged declining resistance of Oct-Nov swing highs as technicals returned net bullish.
For Tuesday, look for some upside follow-through – particularly from Tech indices. Aggressive shorts can work the S&P as it tags clear resistance.