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Sellers Push Range Bound Markets As Bitcoin Heads For Retest

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Nasty set of red candlesticks painted the market, but most of these occurred within the context of trading ranges. It will be a question of balance as Materials and Staples make gains, as Technology suffers. Bitcoin has been on to a hiding, but the retest of the capitulation is coming on modest action and lower volume - the kind of trading you want to see for a tradeable bottom. The Russell 2000 ($IWM) took a 2% hit on higher volume distribution, with the 50-day MA coming into range as a support test. A bullish play would be for a tag of $255 support followed by an end-of-day close above the 50-day MA. Technicals show 'sell' triggers for MACD, On-Balance-Volume and +DI/-DI. Things only get bearish if $255 support is lost. More of a worry is the equal weighted S&P; early gains were quickly reversed, leaving a nasty spike that has a toppy look to it. Technicals are still positive and the 20-day MA has playes as support swing the swing low in November. I think a ...
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Upcoming "Death Cross" for Russell 2000 ($IWM)

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There was some modest buying today from the open, but volume was light and markets are below trading range support established during the latter part of 2024. It's hard to see where the buyers are going to come from given the chaos of Trump. I should add, I listened to Josh Brown's The Compound podcast and he showed an interesting chart of market returns in April-May in the year following a strong return in markets; in essence, selling to pay capital gains tax. Given the precarious nature of markets, and the possibility for this seasonal factor to play out, it's likely we have a couple more months of downward action before value buyers return. If we look at individual markets, the Russell 2000 ($IWM) is looking like the first to signal a long term shift in favor of bears with an upcoming "Death Cross" between the 50-day MA and 200-day MA - perhaps completing before the end of the week. Technicals are net bearish and the volume trend has collapsed since the st...
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S&P and Nasdaq Remain Range Bound

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The S&P and Nasdaq have stalled rallies that haven't yet challenged resistance of their respective trading ranges. There is a case the Nasdaq has come up against resistance, that was once support, of the prior bullish ascending triangle. This level is also near converged 20-day and 50-day MAs. It could be a shorting opportunity with a move to trading range support.
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Equal Weighted S&P Surges as Russell 2000 Bounces Off Support

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With the tech sell-off clouding action in the S&P and Nasdaq we have to look elsewhere for positivity. And there is no lack of alternatives. The equal weighted S&P kicked on from its 'bull flag' breakout, posting a new high, and is well away from key support of 7,800 - meaning it has room for maneuver should tech weakness expand.
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S&P Prepares For Breakout

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A good start to the week has left indices nicely positioned to kick on with volume rising in accumulation. Best of this is probably the S&P. Today' buying left it on the cusp of a breakout, although it wasn't enough to reverse the 'sell' triggers in On-Balance-Volume and +DI/-DI. However, a breakout would likely turn these technicals net bullish once again.
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Sellers Accelerate Action As Confirmed Distribution Kicks In

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Aside from Bitcoin, we are not seeing too much technical damage, but we are seeing a pick up in the volume of seeling. Moving averages will be key in the near term before we have to start looking at horizontal price support and swing lows. The Russell 2000 ($IWM) undercut its 20-day MA, but hasn't yet challenged support defined by the December swing high. The MACD is on a 'sell' trigger and +DI/DI and On-Balance-Volume will likely do the same Monday if selling continues. Friday's selling registered as confirmed distribution, which is a worry for Monday. It's the strongest index, but if this falls under $257 we would likely be looking at a new trading range bound by $245 and $270 that could last a number of months.
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The Nasdaq Redraws Ascending Triangle As Bitcoin Slumps

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There was more wild fanfare today than any real damage to indices despite Microsoft's earnings hit, and Apple's earnings to follow. We will start with the Nasdaq. I have redrawn the breakout as an adjusted 'bullish ascending triangle' rather than a 'bull trap'. A loss of ascending triangle support would bring in to play a future test of the 200-day MA, which I think the index needs, but is not guaranteed. Technicals have seen a 'sell' trigger in +DI/-DI, but other technicals are holding up well. It could get ugly if Apple dissapoints; if that happens, then the 22.2K level is the immediate concern. I'm not sure what to make of the S&P. It's a bit of a mixed bag, I have redrawn it as a skittish bullish ascending triangle, but it may just be a broader rising channel. The 50-day MA is looking like it will be key support on the next test. A loss will open up for a test of the 200-day MA. The Russell 2000 ($IWM) successfully test...
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S&P Challenges Bull Trap As Nasdaq Breaks Out

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Today it was the turn of the S&P and Nasdaq to make their moves as the Russell 2000 ($IWM) takes a rest after its breakout. The Nasdaq had the best of the action as it cleared ascending triangle resistance (although, not all-time high resistance). Technicals are net positive with a new MACD trigger 'buy' the latest bullish trigger. Volume was a little light, but price action is key.
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