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Market Selling Continues As Trading Ranges Establish

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Markets continue their slow down, but without the panic that many were expecting. Volume continues to slide with distribution the order of the day but all indices have support levels to work with. The Russell 2000 ($IWM) is back at the April swing low, and just above the January swing high. This is a natural level to look for support that could offer a new trading range. It may take the approach of the 50-day MA to actually deliver the next rally, but there is time available before this happens. Technicals are mostly negative, but not particularly bad.
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Upcoming "Death Cross" for Russell 2000 ($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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Sellers Appear As Options Expiration Clouds Volume

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We had some decent selling across markets on higher volume, that would register as distribution on a normal day, but on options expiration the true picture is a little cloudier. While this selling looks to be damaging, follow through is needed if it's to evolve into something bigger. The Russell 2000 ($IWM) edged back to former handle resistance, turned support, which is also where the 20-day MA can be found. Another day of selling would take it far enough away from this support to leave it looking at the 50-day MA as its probable next step. There was a weak MACD trigger 'sell' as other technicals have held up well despite the index peaking in early May. The relative underperformance against the Nasdaq looks worse than it is, but even if this recovers a little there may be sufficient merit to see buyers come in on money rotation.
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Bitcoin Pressures 200-day MA With Further Gains Likely

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It's natural for an undercut test of a 200-day MA to reverse on the test, but Bitcoin has been lingering at the moving average with a higher volume accumulation gain. If you took profits, no loss, but with the successful test of the 20-day MA there may be a chance for new traders to jump in, and those with existing profits to roll it a little further.
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Russell 2000 Offers Steady Gains On Successful Backtest

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Semiconductor stocks are hogging all the limelight with their Y2K sized gains, but there is quiet strength in other indices with the foundation for more. The Russell 2000 eptimizes this best after breaking from it narrow handle it has managed a successful test of that handle - now support - with a combined test of its 20-day MA, topped off with a 'bullish hammer'. Technicals are net positive, although the MACD is about to trigger a weak 'sell' trigger. If there is a negative, it's that since the breakout, the heavier volume trading days have favored distribution, but the nature of the trend is still positive.
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Equal Weight Nasdaq 100 Makes Gains As Other Indices Fade

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It was a bit of a mixed day for indices as the equal-weight Nasdaq 100 bucked the trend of other indices and posted strong gains. Remaining indices suffered profit gains as sellers made a long awaited appearance. It was odd to see the equal wieghted Nasdaq 100 makes such a clean move, tagging resistance in the process. Technicals - including relative performance - are firmly in the bullish camp, although it has yet to break to new 2026 highs, which if it was to follow the Semiconductor Index, would mean big gains lie ahead for the index.
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Russell 2000 Kicks On As Bitcoin Approaches 200-day MA and Semis Break

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It was a good day for the Russell 2000 as yesterday's indecision was negated by a respectable day of buying. Technicals are net bullish, but today's volume was a little disappointing given new all-time highs. Better was the S&P, in that it registered an accumulation day with a new closing high. There could be a good day trade if tomorrow starts with a gap high, forcing shorts to cover (although there is unlikely to be many), but no overhead resistance. The equal-weighted S&P bounced off 'bull flag' support and will again be challenging February highs after the last failed test in early April. I expect this test to succeed in breaking higher (why? because triple tops are rare). The Nasdaq is taking baby steps higher and volume has been reasonable, but hardly spectacular - which is probably a good thing. Bitcoin is very close to testing its 200-day MA, and may do so as early as tomorrow. This will likely be a profit taking opportunity, so i...
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Indices Manage New Breakouts

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Lead indices had a good end-of-week finish that registered fresh breakouts. The slingshot index could be the Russell 2000 ($IWM). It traded a nice handle before it broke lower in what looked to be a pending test of its 20-day MA. But instead of that, it reversed and has now broken to the upside. We are looking for a potential measured move target of 320(ish).
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