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...

Aside from a rise in oil prices, which were already trending higher prior to Israel's, and "tag-along" U.S., strike on Iran it remains to be seen what long term impact this will have on markets. I'm always looking at how indices relate relative to their 200-day MAs, and since the latter part of 2025 to now, this relationship is no longer overbought and not the risk I thought coming into 2026. However, we do have well-defined support levels to work with and these should be tested early next week. Again, a loss here wouldn't be hugely damaging as we have 200-day MAs below to offer support. What will be damaging is, as probably expected, the Iran conflict extends into a series of terrorist attacks on U.S. interests to goad the U.S. (and Israel?) into putting boots-on-the-ground in Iran. The Middle East is never a clear in-and-out, and there is no record of success for the U.S. to lean on here. In such a scenario, we have the makings of drip-drip losses in the market ...

I haven't commented much on the Semiconductor Index, but yesterday brought with it a small candlestick and a gap higher that tagged the measured move target. While today saw a 3%+ loss and a potential bearish evening star. The loss came with a MACD trigger and CCI 'sell'; the MACD 'sell' faking off yesterday's 'buy' signal. Aggressive shorts could look for a test of the 50-day MA (a cover price), but in broader terms the trading range is the dominant pattern.

Bitcoin lost ground off its failed test of the 20-day MA. It's now pushing for a retest of the bullish piercing pattern from the start of February. In addition, it's very close to reaching the measured move target marked by the red-hashed line in the chart.