NASDAQ Moves To Challenge 'Gravestone Doji' High
Declan Fallon | Jul 02, 2020 12:26AM ET
The NASDAQ has been leading indices throughout 2020, even the sell-off caused by COVID-19 was not as bad as what was inflicted on the Russell 2000 or S&P. The latest gains are challenging the most recent swing high which was marked by a "gravestone doji" in addition to building on the break of 10,000. On-Balance-Volume is leading the indicators with a strong accumulation trend.
The S&P is rallying off its 50-day MA, albeit on low volume, although On-Balance-Volume is trending higher in line with net accumulation. Other technicals are looking to improve with a fresh 'buy' trigger in +DI/-DI and relative performance gain vs Small Caps.
Small Caps (via iShares Russell 2000 ETF (NYSE:IWM)) were again struggling to get past its 200-day MA with small losses on the day. As with other indices it has to contend with a MACD trigger 'sell', offset by an accumulation trend in On-Balance-Volume. As it continues to underperform both the NASDAQ and S&P it remains a sign that the broader COVID-19 rally for the indices is in need of some rest and probable downside.
Which side of the market will win? Stealth buyers driving the accumulation trend in On-Balance-Volume or the flaky momentum traders heading to the exits on the back of their MACD 'sell' triggers.
Things have gotten a little quiet but this could change at any time. So far, there haven't been the market losses for which to blame COVID-19 despite the increase in infections and mortality, but it feels like it's only a matter of time before it overwhelms the country again.
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