SP500:
Similarly, the Nasdaq 100 also bounced back from its previous week low and moved back above its prior support level of 2275. Last Friday, the Nasdaq 100 closed slightly below the 50 SMA after it hit a trend line resistance.
Nasdaq 100:
At the same time, the Russell 2000 bounced off its previous week low and broke out of a small price channel. It even moved beyond the 3/3/11 high of 830.04 before it retreated back to close on Friday at 823.85.
Russell 2000:
These price actions put the market at a crossroad. The major market indices are bumping against resistance and riding on their support. Depending on the catalyst in play for next week, this market could break above its resistance and resume its upward trend toward higher high, or it can roll over and go back down to retest its recent low. Many sectors are also showing recovery strength. This seems to indicate it will be a broad base rally if it materializes. Next Friday will be another monthly job report. Depending on the tone of the market, this report could provide the tipping point for the future direction of the market.
Gold is still flirting with the 1400 level, and its ETF, GLD is bouncing between 139/140.
AAPL found support near the 326 and showing sign that it could be heading back up to make a new all time high.
Even the semiconductor ETF, SMH is regaining strength.
I will remind myself to be flexible while the market is at a crossroad and trade what I see not what I believe. The market will do what it will do…not what I or anyone else wants it to do. Until the market start to rollover toward the recent low, I will try to catch some swing long trades.
