Wednesday, May 21, 2014

Daily Market Commentary: Russell 2000 Still Under Threat

The indices which mattered are still under threat from bears, those that don't, had a good day. The S&P made in roads towards resistance, but didn't do enough to challenge the 'bull trap'.  Technicals are a mix of bullish and bearish technicals, and it's hard to set the direction until the trading range is breached to the upside (or down).


Meanwhile, the Russell 2000 struggled to post gains. It remains in close proximity to support and vulnerable to a breakdown. The 'spinning top' candlestick is a typical neutral day - offering no edge to bulls or bears - but given other indices gained, but the failure of this index to do likewise gives more to bears.


The Nasdaq posted gains, but didn't clear the consolidation. The index remains range bound with a down-turned 50-day MA to offer resistance.


Only the Dow made up lost ground: the 50-day MA is again support.


For tomorrow, look to the Russell 2000 for weakness. Other indices are edging bull side, but their bullishness is not as great as Russell 2000 bearishness. If the Russell 2000 breaks, it won't be long before other indices head south.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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