Heading into the July 4th holiday and indices experienced a mix of reactions. Large Caps came out relatively unscathed with only a minor reaction to last week’s selling.

The S&P remains caught inside its tight trading range since the start of June. There is an On-Balance-Volume ‘buy’ trigger but other indicators like the MACD and ADX are bearish.

Tech indices continue to feel the pain with the Nasdaq losing 0.5% on a bearish engulfing pattern. Bearish engulfing patterns typically mark reversals but in this case, points to continued selling pressure in what yet could turn into a new downward channel.

The Nasdaq 100 experienced an even greater % loss as it drifted ever further out of its rising channel.  Technicals are firmly net bearish.

The Semiconductor Index took the greatest hit, losing over 1% as it continues to struggle to recover from its channel loss.

Only the Russell 2000 offered any strength as it again pushed into the June ‘bull trap’ and continues to suggest a major breakout is pending. Technicals show a fresh MACD trigger ‘buy’.

Bulls really have one index to watch, the Russell 2000. Other indices are fishing for a swing low but haven’t found one yet.  How will traders post-holiday react?

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