In buying and selling yesterday, only the tech-laden NASDAQ avoided the marketing, edging up 3.04 factors to hold at above 2300 and its five-year large. As I have said, breadth within the NASDAQ has improved.

The DOW was the large loser about the morning giving up 65 factors or 0.58% to fall to 11,150.70, that is just below its key short-term 20-day moving average, a warning. The S&P 500 lost 2.64 factors. The near-tech technical signals for these two indices are the weakest of the four indices.

Small-cap stocks continue to hold after breaking to a new historical large on Wednesday. The Russell 2000 fell 1.58 factors or 0.21%, which can be positive given the extreme overbought condition. The barometer of small-cap performance is up a healthy 13.28% this 12 months. Whilst impressive, I question whether the index can maintain this rate of appreciation.

In commodities news, the May possibly light crude futures about the NYMEX broke above $67 a barrel on Thursday. The near-term signals look relatively bullish and the minor trend is positive. The breakout materialized after a Rectangle formation at between $61 and $65.50. Oil could move towards the $70 degree, last encountered in February, if it can hold at $65.50-$66. But watch for some marketing pressure since the contract is overbought. High oil prices will pressure stocks.

Exchanging within the NASDAQ has come in at over 2 billion shares in the last three straight sessions. Exchanging volume on the NASDAQ came in at about 2.22 billion shares yesterday, above its 5-day and 10-day moving averages of 2.11 billion and 2.18 billion shares, respectively. The powerful volume in yesterday’s marginal up morning is encouraging following a strong volume breakout on Wednesday.

On the NYSE, daily exchanging picked up yesterday. Exchanging on Thursday was 1.61 billion shares, above the 5-day and 10-day moving averages of 1.55 billion and 1.55 billion shares, respectively.

The near-term technical picture for the NASDAQ is bullish but is showing some potential weakening. The Relative Strength remains relatively strong, suggesting a lot more gains if it can hold. The index is holding at above its previous pivot point of 2332.95 and its five-year high of 2333, a bullish sign. The index is buying and selling at above its 20-day and 50-day moving averages of 2297 and 22854, respectively.

The MACD continues to flash a moderate buy signal. The MACD trend is negative but has reversed course. The upside break was bullish after largely trading in an intermediate term sideways channel. Now we will see when the NASDAQ can hold and edge higher towards 2366 and 2387. The index is now marginally overbought so watch for some possible promoting pressure.

For the blue chip side, the near-term signs for the DOW weakened further and are now moderately bearish. The intermediate trend is bullish but yesterday’s break below its 20-day moving average of 11,156 is a warning and could signal further deterioration if it cannot hold. The Relative Strength also fell to below neutral, showing a possible lost of momentum. The MACD turned bearish yesterday and is flashing a moderate sell.

The key for the DOW is whether it can hold at around its 20-day moving average. Indications suggest further weakness, albeit the marketing has created a near oversold condition. Failure to hold could drive the DOW down to 11,092, 11,077 and 50-day moving average at 11,016. A rebound could see the DOW move back to above its 20-day moving average and a pivot point at 11,234.

The Bollinger Bands for the DOW are trending upwards and widening, indicating increased volatility in the near-term. Watch this.

On the S&P 500, the near-term picture is neutral to moderately bullish. The Relative Strength weakened yesterday and is marginally above neutral. The index is exchanging at above its 20-day and 50-day moving averages of 1,294 and 1,283, respectively. The MACD is neutral.

Near-term targets are 1,310 and 1,333. The index needs to hold at its 20-day moving average or we could see weakness.

About the small-cap side, the Russell 2000 is bullish. The Relative Strength is relatively powerful but watch if it can hold. The recent break above the previous pivot point of 745.18 was positive. The trend is positive with higher highs and lower lows.

Watch if the Russell 2000 can trend higher but given the purchasing, the index is extremely overbought. The MACD is positive and appears to have reversed the downtrend.

The next area of resistance for the Russell 2000 is 772 and 803.

The advance-decline line for the NYSE (0.77:1) continues to be mixed, coming in at below 1.0 yesterday. The NASDAQ (1.004:1) managed to hold at above 1.0. The daily A/D reading about the NASDAQ has been above 1.0 in 7 with the last 10 sessions. The 5-day moving average for both the NYSE (1.27:1) and NASDAQ (1.42:1) remains above 1.0.

The marketplace is continuing to show bullish sentiment. The new higher new low ratio (NHNL) for the NASDAQ came in at above the bullish 70% degree for the 14th straight day, coming in at 89.35%. The NHNL ratio for the NYSE (82.69%) has been above 70% for the last 15 straight sessions.

The current technical picture for the four key indexes is as follows:
NASDAQ: Bullish; Relative Strength: Above Neutral; Marginally Overbought
DOW: Moderately Bearish; Relative Strength: Below Neutral; Near Oversold
S&P 500: Neutral to Moderately Bullish; Relative Strength: Neutral
RUSSELL 2000: Bullish; Relative Strength: Relatively Strong; Extremely Overbought

Here is what to watch for on Friday.

The DOW faces more promoting pressure as its near-term technical picture is moderately bearish and the weakest from the four indices. Watch for potential support since the index is nearly oversold.

Tech and small-cap stocks continue to show the strongest technical strength but watch the extremely overbought condition inside the Russell 2000 and marginally oversold condition on the NASDAQ.

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