Posts

Bitcoin Surge As Russell 2000 Shapes A Swing Low

Image
Bitcoin is again on the move, looking more bullish than my initial "bullish outlook". I had looked for a more pronounced 'bear trap' on a duck to the 50-day MA, but instead buyers stepped in and shorts were forced to cover buy. This is excellent right-hand-base development on the longer weekly chart, and it's hard not to see Bitcoin challenging $125K by 2028, if not sooner. It will still be volatile, but long-term investors waiting for a new entry opportunity should wait for prices to narrow again in low volume, then buy-and-not-look-back. Long term buyers should not get sucked into the daily machinations of cryptocurrencies, and should have a proper long term outlook of years - not months or weeks... Anything shorter will need to use adequate risk:reward. If I was to stick my neck out, I might look for $100K for end-of-year and measure risk based on that target. As an asset, I hate cryptocurrencies (and the sphere around them), but they do appear to be influenc...
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

Bulls Were Unable To Build On Morning Optimism

Image
After the Fed driven sell-off that delivered support breaks for some of the indices there was an attempt by bulls to stage a bounce, but traders weren't able to build on the sizable opening gaps, and some indices drifted lower by the close. The Russell 2000 ($IWM) lost the most ground off the open. However, today's close was enough to regain support, leaving yesterday's action as a potential 'bear trap'. Technicals are net bearish oversold. And today's buying volume was below yesterday's selling (distribution). The S&P finished the day where it started, which is also 20-day MA resistance. Aggressive traders could go with a swing trade as the next move could be sizable (particularly if the move is higher). The Nasdaq is dominated by the trading range, but within that we have a consolidation triangle. As it stands, the index is at resistance of this triangle, and given recent selling volume I would be looking for a move to close today...
Read more

Russell 2000 and Bitcoin Break Support

Image
The Russell 2000 ($IWM) delivered on its 'bull trap' as the reversal came all the way back to support before undercutting $288. Selling volume was high but not excessive as the index now looks on course to test its 200-day MA. Stochastics are oversold, and in a bear move these can stay like this for an extended period - so don't be banking on a bounce. What would be bullish is if we get a 'bear trap'; i.e. a close above $287. In the intermediate term (to the end of year) we are due a tradable bounce and a 'bull trap' would set up for one quite nicely.
Read more

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

...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

Archive

Show more