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Nasdaq Still to Confirm Breakout, S&P 500 Fails to Test Resistance

Published 2023-05-11, 12:26 a/m
US500
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DJI
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US2000
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IXIC
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Hardly inspiring, but it was a price breakout. The Nasdaq edged itself above resistance, but it will need to do more to confirm. There was a MACD trigger 'buy' with generally improved technicals - although On-Balance-Volume remains bearish. Today's candlestick was not exactly blowing it out of the water, but it did qualify as a breakout.

COMPQ Daily Chart

Things get a little sketchy when we dig into some other indexes. The S&P 500 didn't get to challenge resistance but did finish with a dragonfly doji, typically, this is important during a swing low, but it has less relevance when it appears as part of a trading range.

SPX Daily Chart

The Dow Jones Industrial Average wasn't so lucky, although it looked much worse off earlier in the day. The 50-day MA looks key for support.

INDU Daily Chart

The Russell 2000 ($IWM) finished with a bearish 'black' candlestick just below 50-day MA resistance. However, because this index is stuck in a trading range, the significance of this potentially bearish candlestick is reduced. On the plus side, there was a MACD trigger 'buy.'

IWM Daily Chart

We need to be careful here. There was a breakout, but it remains vulnerable to a 'bull trap.' It will only take a close below resistance to confirm (for the Nasdaq). But, a decent gain tomorrow (in the Nasdaq) would firm up the move and help drive demand for the S&P and Russell 2000.

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