Not Good. Indices remain under pressure after selling into support has only resulted in a weak bounce. It won't take much to tip the S&P, Nasdaq and Russell 2000 back into the red. The Russell 2000 ($IWM) is the canary in the coal mine. Today was a second narrow doji after Monday's. Volume was down, reflecting the disinterest by buyers. Technicals are net negative and last week's gap down has finally closed. Don't be surprised if we see a solid red candlestick before the week is out. Even if there is a rally, the 20-day MA will be there to add its own pressure.

The problem when you trade off what Trump says, is that you are only in for disappointment. Monday's reversal that delivered what should have been a tradeable bullish engulfing pattern has devolved into a distribution sell off across lead indices. The Russell 2000 ($IWM) gapped down but was at least able to hold onto $245 support. Technicals are net negative, but not fully oversold, so I would be looking for another day of selling that should take it into a test of its 200-day MA.

Markets are reflecting the turmoil in the Middle East by being as indecisive as the Administration in its goals for the region. Headlines talk of significant declines, but that's not what we are seeing. The Nasdaq has been particularly resilient despite the added pressure from a possible AI bubble. I have marked in declining resistance from January, that intersects with today's close, and marks a possible short trade (stop on a close above today's nasty looking spike high). There is a weak 'buy' signal, but other indicators are bearish, despire the sharp acceleration in relative performance to the Russell 2000 ($IWM).

It was not a guaranteed thing, and if Monday sees gains (unlikely), then a bear trap can't be ruled out. It was not a wholesale disaster, but it will set the tone for the week. The Russell 2000 ($IWM) gapped down but wasn't able to build on the opening loss. The end-of-day finish as a doji leaves it in a bit of a no-mans land, but if there is a gap higher and a closing white candlestick tomorrow, then we have a bullish morning star reversal pattern. Stochastics (momentum) is not entirely oversold, which you would like to see for a reversal pattern. Technicals are now net negative, so it does point towards further losses, but do watch for an opening gap higher that could offer a long trade.

We are seeing a pick up in trading volume with selling dominating, but we are not seeing a new downward trend, at least, not yet. News headlines paint a harsher picture of market action, but it hasn't borne out yet. The Russell 2000 ($IWM) has drfited towards range support on a sequence of lower highs (but not yet lower lows). I expect this squeeze to play out with a solid red candlestick breakdown (and a good short trade) with a target of the 200-day MA. This should turn technicals net negative, and then, we can start to see if a new bear trend forms.

The Iranian war has flagged extreme headlines, but markets haven't broken from their trading ranges bar a few exceptions. The Russell 2000 ($IWM) is the most bullish of the indices. The index successfully defended $255 support but did finish the day below 50-day MA support. Technicals are still mixed, with momentum (Stochastics) likely the next indicator to switch bearish, which would make bears favorite overall. The S&P spiked below 6,790 support before staging a recovery to close above this (real-body) support line. Technicals are net bearish, but the spike low should mark a point of demand. However, if tomorrow, the index closes within the range of the spike low, then all bets are off. Aggressive traders could look to play a long trade off the open, but if gains fail to build earlier then I wouldn't stick around. It was a different story for the equal-weighted S&P. This posted a clear breakdown from the rising trend, but did manage to successfully d...