Posts

S&P And Nasdaq Hang On As Russell 2000 Comes Under Pressure

Image
Interesting times for markets this week. I'll start with the Russell 2000 ($IWM) as it finished the week with a bearish black candlestick just above trading range support. Candlestick like Friday's don't typically have a good ending, but if we some form of spike low down to $285 then I would look for a trade-worth low. Note how intermediate-term [39,1] stochastics are now oversold - another reason to pay attention to any reversal candlesticks that appear over the coming days.
Read more

Popular posts from this blog

Upcoming "Death Cross" for Russell 2000 ($IWM)

Image
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...
Read more

...And Then Sellers Pushed Hard

Image
I don't know if the equal-weighted S&P is a harbringer of things to come for other indices, but a second day of heavy selling has undercut the 50-day MA, and breakout support. Technicals shifted net bearish with a worrying undercut of mid-level stochastics. The next support level is down at 8,600s, but I want to see oversold stochastics on such a test. However, the ease at which existing support was lost is a concern.
Read more

Bulls Have Something To Work With - Nasdaq, Dow and S&P Looking Good

Image
Friday's losses were modest, and traded volume below that of prior day's buying. This has established a baseline risk (a loss of last week's swing low) for any future upside reward. We won't want to see an extension of Friday's selling as this would put immediate pressure on those lows, particularly if buyers can't stage a comeback in early afternoon trading should losses kick off early. The Nasdaq is nicely positioned. It's range bound, so can flux either way, but traders do seem prepared to defend its 50-day MA, and given its below its 52-week high it will not have attracted the attention of momentum traders/algos yet. Wednesday's and Thursday's trading ranked as accumulation. The +DI edged above -DI (bull trend), but with the ADX below 20 it's only a weak trend - typical of a trading range.
Read more

Indices Seeking Support With Trading Ranges In Play

Image
The equal-weighted S&P found buyers close to its 50-day MA, creating a higher high as momentum moves towards midline support of a bull cycle. Watch for a move down to test 8,725 - if this was to come on bullish spike (hammer or doji) it could be considered a good buying opportunity. The Russell 2000 ($IWM) is attempting a double bottom sub-$290. I would like to see Stochastics [39,1] below 20 to confirm. However, the 'bull trap' from August is the dominant influence, and such patterns typically result in a minimum test of prior support ($287), and often, something worse. As with the equal-weighted S&P, I would like to see a spike low to $285. The S&P is bouncing around just above breakout support of 7,600. This might be the best 'buy-now' play with the 50-day MA just below to lend additional support. Technicals are mixed, edging bearish, with momentum only drifting out of an overbought state. As trend trader you want to see this overbought, s...
Read more

Selling Pressure Continues - Russell 2000 ($IWM) Net Bearish

Image
Indices continued to drift with the Russell 2000 ($IWM) experiencing the largest loss. Technicals for the Russell 2000 are net bearish with the index on course to test $287. Both 20-day and 50-day MAs are now cleanly undercut. Trading volume increased to register a second day of distribution in a row. Momentum has been in a bull cycle since April. It waivered in July before it recovered, but it's already in the same position now as it was then, with no price support nearby; further losses are likely.
Read more

Small Caps Blink As Sellers Cash-In Their Chips

Image
Friday's selling looked worse than it did given the sequence of narrow trade days, but it did rank as selling, and in the case of the Russell 2000 (IWM), registered as distribution. Technicals for the Russell 2000 ($IWM) included a 'sell' trigger in the MACD and an acceleration in bearish ADX (+DI/-DI) metrics. Because of the earlier 'bear trap' it's now considered range bound, and now on course for a test of $287. The equal-weighted S&P eased back to its 20-day MA while remaining in a bullish trend. It will probably morph into a trading range, but it will take a high degree of selling to get there. Technicals are mostly bullish with only a 'weak' MACD sell to navigate. The weighted S&P maintained its breakout on a weak candlestick. It could tolerate a few more days of selling, but dropping below 7,600 would leave it open to a larger retracement back to 7,235. There is a weak MACD trigger 'sell' to navigate, but there are su...
Read more

Last Chance To Grab a Bargain?

Image
What carried for the end of the last week still has relevance today. If you haven't been a buyer, you still have a chance now. There are a number of support opportunities across indices. The Russell 2000 ($IWM) is holding support of its converged 20-day and 50-day MAs. The 'bull trap' is still the dominant (bearish) play, so if there is an undercut of these moving averages, and by that, I mean an end-of-day close below these averages, then a move back to $287 is favored.
Read more

Archive

Show more