Tuesday Could Turn Out To Be An Important Day For the Market

By | June 19, 2018

In Monday’s session the Dow Jones Industrial Average, the S&P 500 Index, the NASDAQ Composite Index, and the Russell 2000 Index each tested a two month uptrend line on their daily charts. Despite strong selling pressure in the morning, they fought back to close above their respective trend lines and form hammer candles. The formation of a hammer candle after a successful retest of support is considered very bullish.

There are lots of reasons to remain bullish. On Monday the Russell made a new all-time and the other indices are not far behind, but there are those who are skeptical of the rally. They cite weak volume and the fact that indices like the NASDAQ Composite are weighted in such a way that a few stocks have a disproportionate influence on their movement.

Overnight futures trading currently suggest that the indices will be under more pressure again tomorrow morning. If they are able to repeat Monday’s performance and fight off this second downside wave, it would be upside follow-up and further confirmation of the intermediate term trend. If not and the uptrend lines are broken, it would signal a potential shift in the intermediate term.

Tuesday may be turn out to be a very important trading session.

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