The DJIA, S&P 500 index, and the NASDAQ were all able to recapture their 50 day moving averages on Friday and move back above trend line support levels, while the Russell remains well below the intersection of the recent “death cross.” On Thursday, 39% of the stocks in the S&P 500 index were below their 50 day moving averages, and that number was 44% after Friday’s session.
On a weekly timeframe, however, the Russell, formed a hammer-like candle off an area that has supplied support this year, and the other indices bounced off rising trend lines. It is likely these levels will be tested again next week, considering the large range shifts in the market last week.
It could be argued that the European markets have been leading the US market since July of this year. On Thursday, the Germany iShares (EWG) and the France iShares (EWQ) returned to their August lows, and bounced off those levels in the Friday session. The ability or inability of the European markets to hold above this key support should translate over to our market.