Last Wednesday and Thursday delivered the first real losses for this rally since it started around 3 weeks ago, but Friday put a nice 'full stop' to these losses—enough to offer buyers a relatively low risk:reward play for those seeking a trade.
The NASDAQ finished with a doji, and potential bullish harami cross. The latter is weakened by the lack of oversold momentum (stochastics) indicator. However the NASDAQ is enjoying a relative outperformance over the S&P.
Meanwhile, the S&P closed with a bullish harami just above its 200-day MA and sufficiently near support of the February double-top to suggest it's finding demand there.
Technicals are net positive and the index is a long way from February/March lows. As the NASDAQ was outerperforming the S&P, here we have the S&P outperforming the Russell 2000.
The iShares Russell 2000 ETF (NYSE:IWM) is nestled on breakout support and managed to recover most of Thursday's losses. It too enjoys net bullish technicals, but is still underperforming relative to peer indices—although managed to make back some of these losses on Friday.
The measured move target from February's high was negated on the breakout, so look for higher prices in the months ahead.
The losses of last week kick started a new swing high for the rally; the question is whether last week is a swing high, or if Friday's buying simply marked a pause in the rally. The truth probably lies somewhere in between—I suspect the reversal marked a zig-zag reversal, and we have got the 'zig,' but have yet to see the 'zag.'