Large Cap Indices finished right on resistance from the October and November swing lows.
Tech indices had already tagged and breached comparable levels so the expectation is for a breach here too, but aggressive shorts can look to attack here. Stochastics [39,1] are at the 50-midline – the cut-off between a bull and bear market and both MACD and On-Balance-Volume are bullish.
The Nasdaq 100 finished at the 50-day MA but if it can break through it will open up a rally to declining (descending triangle) resistance, although the index is underperforming relative to the Russell 2000(NYSEARCA:IWM). An undercut of November ‘swing low’ (6,440) would offer a new shorting opportunity to the December swing low of 5,895.
The Nasdaq (NYSEARCA:QQQ) has a target of 7,200 declining triangle resistance and is outperforming against the S&P (but underperforming against the Russell 2000). As with the Nasdaq 100, a cut below the November swing low (6,830) would offer a new shorting opportunity to the December swing low of 6,190.
The Russell 2000 is the only index not to have reached the swing low set from October-November or its 50-day MA. Technicals are all bullish. With the intraday range narrowing there is a possible short opportunity, but wait for an undercut of today’s low at 1,425 before entering. If you operating on a buy-and-hold investor strategy you need do nothing.
For tomorrow, watch how Large Cap indices react at resistance. Should markets fade after the first half-hour it may be an opportunity to short the index and run a stop above today’s highs.