It’s been two months since I went on vacation and the Nasdaq and S&P aren’t very far from where they were when I left. There’s been a whole lot of drama during that period yet the indices are largely unscathed — with the notable exception of the small caps. The bulls CLEARLY liked the Fed’s interest rate cut today as evidenced by what I believe is the largest one-day gain this year. The Russell 2000 was up a whopping 4%! So it’s looking like all systems go for the bulls once again. Let’s see if they can push the indices to new highs.
If there’s one thing that I could complain about today it’s the volume. Granted, the bulk of today’s volume came late in the day after the Fed’s decision but I’d still like to see more volume accompany such a large price move.
Here’s the Nasdaq chart:
It’s a similar story for the S&P 500. Note that bullish divergence in OBV.
Even after today’s huge move the Russell 2000 remains in bear territory — under its 200-day moving average. This may be the bears’ last hope.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Lat |
| Intermediate | Up | Up(+) | Up(+) |
| Short-term | Up(+) | Up | Up(+) |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
