Morning action had suggested 200-day MAs had finally proven to be a step too far for the indices, but a late day recovery placed the pressure back on these key moving averages. Certainly, there is strong indication 200-day MAs will be broken to the upside.
The S&P found support at the back test of declining resistance turned support. Volume climbed to register an accumulation day as the index also finished above 1,260 support.
The Nasdaq is similarly poised, although there is a far greater level of tension between rising 50-day MA support and falling 200-day MA resistance; look for this to sharply resolve one way or the other – should be a good trade (likely to the upside).
The Russell 2000 is the loosest of the indices in that it’s neither near 200-day MA resistance or 50-day MA support. Therefore it may lag in response when the break finally comes in either the Nasdaq or S&P.
For tomorrow, look to Futures with the S&P likely to lead the 200-day MA break, but the Nasdaq perhaps more likely to benefit from a break.
