It wasn't a cavalry charge, but buyers stepped in to break the two days of selling in the Nasdaq and Russell 2000. While buying volume was relatively light compared to last week's selling, it does give bulls a chance to continue the rally within the rising channel.
The Russell 2000 (IWM) is steadily building its gains as it moves along in the middle of its channel. As long as momentum remains overbought it will give bulls the underlying demand to keep things rolling higher.
The Nasdaq closed with a doji. The narrow intraday range suggests the selling has come to an end and that bulls are well placed to advance. If bears were to cling to something, it's that the MACD is on a 'sell' trigger.
The index is also expanding on its underperformance relative to the S&P 500, but it has been pushing big gains since May, so such a move is hardly unexpected.
If there is a neutral index it's the S&P 500. It didn't experience any of the selling of the Nasdaq and Russell 2000 late last week, and yesterday's move actually registered as a small gain, enough to see it pressuring all-time highs as it runs close to channel resistance.
On-Balance-Volume has seen a strong acceleration in accumulation, adding to bullish momentum for an indicator that has largely flatlined over the last six months. It remains to be seen if this is the start of a step-up in price trend, but the initial signs are good.
For tomorrow, small volume gains may be enough to post a solid white candlestick for indexes. It likely won't be until September that volume returns, so low-key price gains should be the order of the day.