Morpheus Trading: The Russell 2000 closed back above the 200-day MA after several weeks of discussion around $1,100, which is a positive sign. The bullish reversal candle on May 15 held up after two successful tests on May 20 and 21.
The next resistance level is the declining 50-day MA, which may potentially line up with prior swing highs around $1,140.
The Nasdaq Composite closed out the week above the 50-day MA, with the 20-day EMA turning up (bullish sign). The Nasdaq may continue to rally until the 4,225 to 4,250 area, where there is quite a bit of overhead from the basing action in March and a prior swing high in January.
With the Nasdaq back above the 20ema and 50ma, the timing model shifts into buy mode. As mentioned last week, we will continue to trade with reduced size until we have more bullish confirmation from our positions and from other leading stocks breaking out to new highs.