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Small Caps Blink As Sellers Cash-In Their Chips

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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 $287. The equal-weighted S&P eased back to its 20-day MA while remaining in a bullish trend. It will probably morph into a trading range, but it will take a high degree of selling to get there. Technicals are mostly bullish with only a 'weak' MACD sell to navigate. The weighted S&P maintained its breakout on a weak candlestick. It could tolerate a few more days of selling, but dropping below 7,600 would leave it open to a larger retracement back to 7,235. There is a weak MACD trigger 'sell' to navigate, but there are su...
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Upcoming "Death Cross" for Russell 2000 ($IWM)

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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...
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Last Chance To Grab a Bargain?

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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.
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Bitcoin Surge Kicks Off Right-Hand Base

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The long term 'buy' signal in Bitcoin has paid dividends (for now), and given those who wanted a short term trade a solid boost. It will ease back over the coming days, but long term buyers can safely hold as it's unlikely to come back to 65K anytime soon. As I mentioned before, this is a successful test of the 200-week MA. Only upside remains.
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Bitcoin Surge - Long Term Buyers Celebrate

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Bitcoin has traded around its 200-week MA for the best part of the summer, and I have been saying it was a long-term buy at this level. The past few days have seen this cryptocurrency surge, setting in motion the start of the development of the right-hand-base. This base started from the decline in the summer of 2025, and will likely require another year or two before it makes its way back to $125; realistically, it could spend another year trading between $65K and $83K.
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Media Talks Of "Slides" But Breakouts Not Done Yet

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One (semi-)bad day in markets does not make for a bear market. Today didn't deliver for markets the baby-step gains of recent days, but instead offered a large step down. The Russell 2000 ($IWM) edged a breakout last week, but today's loss took it back to breakout support. Another down day tomorrow will mean a 'bull trap' and a likely move down to (and below) $287, and would probably be a short play. Longer term, the 200-day MA would come into play.
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S&P Trades Tight Handle With Excellent Risk:Reward For Longs

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Bullish setups continue to present themselves for traders. Best of these look to be in the S&P, but there are good setups all around. The S&P is trading a narrow handle just above its initial breakout. Technicals are net bullish and showing no sign of negative divergence. Volume has been declining across this narrow pattern, as expected, but should pick up on the breakout. If there is a caveat, watch for the fakeout; this will show as a spike low - possibly as soon as tomorrow - with a close back in the range. The index should break higher the day after this happens. A fakeout spike would be an nice buy. Any fakeout shouldn't need to undercut 7,600.
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Bulls Take Friday's Finish As Breakouts Offer Excellent Risk:Reward Plays

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It was a good close to the end of week. Bulls have set things up nicely for next week, to the point that even buying at the open might be worth a shot (assuming no major gap higher). The Russell 2000 ($IWM) offers good risk:reward using a stop on Thursday's lows.
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