Despite Sideways Action, US Indices Head for Resistance Levels

Following a positive Monday, US indices moved mostly sideways yesterday as bears managed to prevent a broader follow-through rally.

There has been a decent volume of purchases and a more discrete volume of discrete sales. It is safe to say that we have a swing low in place since late December, and a really viable one, all building on a broader base pattern started in October.

I haven’t mentioned a particular index in a while, but it has posted solid gains these past two days.

In addition to removing the bearish “black” candle for December, it has also broken above its 200-day MA with an acceleration of its high performance against the . I consider this last relation the technological equivalent of the theory of . And so the semiconductor outperformance is bullish for the tech sector as a whole.

Description: SOX Daily Chart

Although semiconductors are advancing by leaps and bounds, he has yet to win the battle against his December “black” candle, which also represents the resistance level of the November-December trading range. However, it benefits from clearly bullish technical indicators and outperforming large-caps.

Description: COMPQ Daily Chart

The S&P 500 is also working towards the December resistance level, but has the added benefit of doing so above its 200-day MA. Technical data is positive on a net basis, but the index is underperforming its peers in the technology and small-cap sectors.

Description: SPX Daily Chart

Description: SPX Daily Chart

The index to watch closely today is the Russell 2000 ETF. (). It is challenging the consolidation resistance for the fourth time, and no one has ever heard of a quadruple top, so I would expect a rally above $188.70 over the next few days.

Description: IWM Daily Chart

Description: IWM Daily Chart

Looking at the state of the indices, it’s hard to see where the bears have an angle. If he were to follow in the wake of the Semiconductor Index and rebound, he would push towards the development of lateral bases on the right – bases that began development in late 2021.

The article is in Spanish


Tags: Sideways Action Indices Resistance Levels