NASDAQ Awaits Other Indices To Follow Its Lead; V-Recovery In Place (For Now)

Investors have been keen to buy tech stocks but there has been a general reluctance to buy into other Large Caps and smaller growth stocks—a few exceptions aside. 

The NASDAQ had edged a breakout into the February gap down but didn't fill this gap; typically, when trading enters a gap it usually closes it quickly because there isn't historic supply or demand to stall the action. But this hasn't been the case for the NASDAQ. As a result, the index is sitting on breakout support, waiting for buyers to push things higher. On a positive front, all supporting technicals are bullish. Also, trading volume has remained robust—there is still interest in tech stocks. 

The S&P 500 is a few resistance levels below where the NASDAQ lies—the S&P still having to get past its 200-day MA, although it is nicely set to do so. Aside from weak relative performance against the Russell 2000 other technicals are bullish. Trading volume is falling, which is not a great sign but not terminal. 

The Russell 2000 (via iShares Russell 2000 ETF (NYSE:IWM)) is further behind the S&P; it's only working a challenge of the March gap down. Volume was light as it holds onto support/resistance. Technicals are bullish with Small Caps outperforming the leading index, the NASDAQ. However, it has a long way to go.

With the shortened week for Memorial Day weekend, bulls will want to see the NASDAQ push into filling the gap as the S&P and Russell 2000 move towards their next resistance levels. The relief rally continues apace as the V-recovery remains in play (for now).