Markets have done well to hold the sizable gaps after version 1 of the US-Iranian ceasefire, and if there is reason for optimism, it's that markets are exepecting a version 2 of the ceasefire relatively soon(?). The Russell 2000 ($IWM) returned to a net bullish technical state as the base breakout is on the way to challenging $270. Since the test of the 200-day MA there hasn't been an opportunity for 'value' buyers to step in on a pullback. This might happen when $270 is tested.

If you a follower of JC Parets you would be looking at a (very) bullish market outlook. I would be more cautious, but today's action has done much to negate some of the lingering bearishness from yesterday. However, markets in a trading range should be considered neutral until all-time highs are breached, but long term investors can accumulate. The Russell 2000 ($IWM) gapped higher yesterday, but closed with a bearish black candlestick. However, today's buying managed to createa a bullish engulfing pattern to negate the bearish black candlestick. In addition, yesterday's gap created an "island reversal" which is a significant (bullish) reversal pattern. Note, this gap can't close for the pattern to be true. Technicals are improving with a 'buy' trigger in stochastics to match earlier ones in On-Balance-Volume and MACD.

So we have markets coming to (or just beyond) resistance and a Trump deadline for Iran. Consequently, we are in position to see a sizable move tomorrow. Those markets that have broken resistance are signalling towards a positive outcome (or perhaps, a kick-the-can deadline for Iran). But if news is bad and we gap away from resistance, then many markets will be back at 200-day MAs. The Russell 2000 ($IWM) is approaching converged resistance from $255, declining resistance and 50-day MA. Today's buying was on low volume, but counts as relative "accumulation" and marks itself as a possible bottom breakout.

Markets swung back towards buyers, although there is plenty of work to do before we can call a rally. Best of the action was the S&P as it cleared declining resistance but has still to challenge its 20-day MA. There was a new 'buy' trigger in the MACD, but it's a very weak signal given the indicator is swimming below the MACD zero line.

The positivity generated by yesterday's buying found itself under pressure today as 'gravestone doji' and 'inverse hammers' dominated. The good news was that support from weekly charts held and there is enough of a gap to offer a few days of wiggle room before sellers return. The problem is we should see selling tomorrow if these candlesticks play to form. The bearishness of these candles is negated by a close above today's highs. The Russell 2000 ($IWM) is perhaps the most vulnerable as it finished with the 'gravestone doji'. However, the recovery of the 200-day MA should give some grounds for optimism, and there were new 'buy' signals in the MACD and On-Balance-Volume. There appears to be a buyer around $243.75, so pay attention to volume action near this price level.

There is one thing a chaotic Trump can't control and that's the market, and the market is not pricing for good news any time soon. What good news there is, is that this decline is likely to lead to a good buying opportunity, similar to one last seen in April 2025 (as per the tables visible at the end of every post; if you just follow these signals you would be catching most of the major lows). We are only at the start of such a decline, but it's one I will be tracking. The strongest index is the Russell 2000 ($IWM). It only just undercut its 200-day MA, and may yet defend this moving average, but it has a tough fight ahead of it. Technicals are net negative, but it's outperforming the Nasdaq, and posted a distribution day yesterday. If this does manage to recover it will set up a bounce opportunity and will be one of the few buying opportunities, but to do so, it has to close above its 200-day MA, ideally on a bullish hammer or similar reversal candlestick.