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Russell 2000 Kicks On As Bitcoin Approaches 200-day MA and Semis Break

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It was a good day for the Russell 2000 as yesterday's indecision was negated by a respectable day of buying. Technicals are net bullish, but today's volume was a little disappointing given new all-time highs. Better was the S&P, in that it registered an accumulation day with a new closing high. There could be a good day trade if tomorrow starts with a gap high, forcing shorts to cover (although there is unlikely to be many), but no overhead resistance. The equal-weighted S&P bounced off 'bull flag' support and will again be challenging February highs after the last failed test in early April. I expect this test to succeed in breaking higher (why? because triple tops are rare). The Nasdaq is taking baby steps higher and volume has been reasonable, but hardly spectacular - which is probably a good thing. Bitcoin is very close to testing its 200-day MA, and may do so as early as tomorrow. This will likely be a profit taking opportunity, so i...
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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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Indices Manage New Breakouts

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Lead indices had a good end-of-week finish that registered fresh breakouts. The slingshot index could be the Russell 2000 ($IWM). It traded a nice handle before it broke lower in what looked to be a pending test of its 20-day MA. But instead of that, it reversed and has now broken to the upside. We are looking for a potential measured move target of 320(ish).
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Russell 2000 ($IWM) Breakdown or "Bear Trap"?

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There is an interesting setup coming for the Russell 2000 ($IWM) Today's action saw a move back into last week's breakout gap that registered as a breakdown from its narrow handle, BUT, retained the characteristics of the breakout by remaining above $270. In addition, we have a fast approaching 20-day MA that could provide a cue for buyers to step in. Technicals remain net bullish, although today's volume registered as distribution. While I tend to be a 'glass-half-full' person, I am leaning here towards a possible 'bear trap' that should resolve tomorrow; if we see buyers step in after the first half-hour of trading (when the likely direction for the market that day is established), then it might be worth a long play.
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We Have To Talk About Kevin: Consumer Sentiment

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Nothing really to add from the weekend, but the one chart that is leaving me confused is the University of Michigan Consumer Sentiment Survey. Consumer sentiment is in the toilet, really in the toilet - no surprise really given tariffs and general Administration f*ckisms - but the market has been pushing new highs rather than pivoting to new lows as has happened in the past.
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Russell 2000 Shapes Bullish Handle As Bitcoin Continues To Advance

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Indices continued to post gains but the Russell 2000 ($IWM) remains in the process of consolidation. The index is shaping a bullish handle which offers a nice risk:reward play for those looking to play the break. Volume has been light across the pattern and well below that of the March capitulation, and below even that of the early year advance. The equal-weighted S&P is attempting a 'bull flag', although it's a little scrappy. Technicals are net bullish but its underperforming relative to its weighted average and this weakness is expanding. The S&P edged a breakout of its small handle, which gives an indication that the equal-weighted S&P should follow suit on the break of the 'bull flag'. The only caveat is the edged breakout lacked sufficient consolidation to shake out the weak hands, so it leaves the move vulnerable to volume selling. The Nasdaq finished Friday on higher volume accumulation after a successful defense of the break...
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Equal Weighted S&P Primed For Breakout

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After the rejection at resistance it would have been easy for the equal-weighted S&P to come back to its moving averages. However, today's close delivered a bullish dragonfly doji, although momentum is overbought which means it's not a reversal candlestick. Given the proximity to resistance it's well placed to deliver a breakout following the lead of weighted the S&P. Technicals are net bullish, but there is still significant underperformance against the weighted average.
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Equal Weighted S&P Repelled By All-Time Resistance

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It's of no coincidence that when sellers appeared for the equal weighted S&P they did so at resistance. Today's candlestick at all-time resistance was almost a bearish enfulfing pattern with a spike high penetrating resistance. Given the weighted S&P had already broken to new all-time highs, the guidance here is for equal-weighted S&P to follow suit. BUT, if the weighted S&P undercuts breakout support to leave a 'bull trap', then much worse is likely to follow.
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