Third Day of Bullish Action on Wednesday
A third solid day of bullish action has built up the potential for market double bottoms.
Selling from here will be treated as a pullback rather than a drop into the abyss.
For the S&P(NYSEARCA:SPY), volume picked up to register as accumulation. A test of 1,940 will be interesting – watch for this tomorrow. On-Balance-Volume is close to a ‘buy’ trigger, to support the earlier signal in the MACD.
The Nasdaq (NYSEARCA:QQQ) broke resistance of the declining channel. A push to the 50-day MA at 4,722 is the next target. The push below 4,350 left a ‘bear trap’, so any weakness will want to hold on to former resistance, turned support at 4,350. On-Balance-Volume marks the breakout with a ‘buy’ trigger.
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The Russell 2000 (NYSEARCA:IWM) was not the same high flyer as Large Caps, which was a little disappointing, but the index was able to push itself back inside the prior consolidation.
The Dow (NYSEARCA:DIA) might be the index to confirm a double bottom. It closed today right on the neckline. Watch for a push to the 50-day MA at 16,728.
For tomorrow, a retracement back to Wednesday’s open might be the cue to bring buyers in from the sidelines. It has been a long wait, but now may be the time.