TVO Market Barometer 8/30/17: Breakout or fakeout?

After recently consolidating in a narrow range (in both price and volume), the S&P500 and the Nasdaq broke decisively above their descending trendlines in Wednesday’s session. Many bulls are now questioning whether the move was real, or just another “fakeout” for the bears to put on more short positions (as if they haven’t had enough lately). Well, if you go by today’s volume, 0% overall isn’t very impressive for a breakout. On the other hand, though, the Nasdaq firmly logged another volume accumulation day (the 4th one in the past 2 weeks), but SPY and the big board have yet to follow suit. The triple whammy of catalysts coming up can certainly provide enough fuel for a bullish “confirmation day,” however, IO is still showing OVERBOUGHT II in the short term, so another quick flush (or a slow burn, which would frustrate just about everybody) is a possibility as we head into the weekend. -MD

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