The week continued its bright start with a resistance break for the S&P. Technicals are improving, with the MACD and On-Balance-Volume on the verge of a new 'buy' trigger. However, there was also a snap-back relative swing against Large Caps and back to Small Caps despite the breakout. Bulls will be gearing up for a measured move; the first target is 1,920.
The Nasdaq posted a good gain on higher volume accumulation. The index blew past its 50-day MA, and in the process generated a 'bull trap'. Today's action complicates a bearish head-and-shoulder reversal, with bears perhaps looking at a double head-and-shoulder; in this scenario, resistance kicks in 4,371. For Wednesday, look for a break of the 20-day MA. The 20-day MA will be an important level to attack for shorts looking for a quick trade, so it may be a tight day tomorrow.
