Given overnight news and Netflix (NASDAQ:NFLX) disappointment yesterday I was surprised to see markets finish as strong as they did, particularly after comments on the economy by the Fed Chairman.
The S&P opened at support and 'engulfed' the prior day's trading; it's not a true bullish engulfing pattern as this is a reversal pattern and what we have is a breakout, but it does contribute to a confirmation of the breakout.
The Dow Jones is inching towards channel resistance. In the context of other indices, for the Dow it was a low key day.
The NASDAQ threatened a nasty double top after the market gapped down, but a strong push into the close retained the breakout.
Opportunists could have taken advantage of the gap down in the NASDAQ 100 as it started picture-perfectly at breakout support. Some traders did get lucky as volume climbed to register as accumulation.
The biggest gainer was in the Semiconductor Index but it didn't quite negate the breakdown. I would be looking for shorts to attack this today with the 20-day and 50-day MA overhead.
The Russell 2000 is firming support at the 20-day MA and the risk:reward is looking better here for longs wanting to pre-buy a challenge on resistance. Technicals are still mixed and relative performance remains weak, but it looks good.
For today, aggressive shorts can look to the Semiconductor Index but if Tech indices hold their breakouts it could drag the Semiconductor Index higher. Indeed, the NASDAQ 100 had offered the clearest buying opportunity yesterday. It finished in the green.
The Russell 2000 is struggling a little below resistance, but the lack of attention could be beneficial for those looking for a low-risk buying opportunity. There are chances here but markets are at a bit of a crossroads.