The month started with indices pushing new all-time highs on summer trading volume. The past week have seen some easement off those highs but there is plenty of support to work with.
For the S&P there is the 20-day MA and breakout support of 2,953 just below. The recent selling did produce a MACD trigger 'sell' but other technicals are all in good shape.
Traders might have to be a little more careful with the Nasdaq. There is a possibility for a 'bull trap' but with the 20-day MA just a few points below there is still enough of an area of demand for this to count as a successful support test instead of a bull trap. It too has a MACD 'sell' trigger but other technicals are in good shape.
If there is a disappointment it's the Russell 2000. The promise of a significant swing low emerging in May/June is now losing ground. There is a possible 'bull flag' to work with, but even this is pressuring support than looking to push beyond resistance. The return to relative underperformance vs the S&P and Nasdaq is what's hurting. Not something you want to see if looking for confidence in speculative growth stocks.
In contrast, the more select Dow Jones Index is playing a stormer. The MACD is holding on to its June 'buy' signal while relative performance makes a bullish 'signal' cross. Investors finding comfort in 'blue-chip' giants.
The Semiconductor Index continues to chug along, outperforming the Nasdaq 100, but remaining below April highs. The upward channel is intact and there is still another couple of weeks before it gets to 1,600.
For next week, it will be about Large Caps consolidating their breakouts and bringing Tech indices with them. This may encourage a fresh round of discount buying of Small Cap stocks. Undercuts of 20-day MAs in the Large Caps and Tech would likely coincide with a downside break of the Russell 2000 'bull flag', leaving indices back inside their - now long-standing - trading ranges.
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