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S&P Prepares For Breakout

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A good start to the week has left indices nicely positioned to kick on with volume rising in accumulation. Best of this is probably the S&P. Today' buying left it on the cusp of a breakout, although it wasn't enough to reverse the 'sell' triggers in On-Balance-Volume and +DI/-DI. However, a breakout would likely turn these technicals net bullish once again.
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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 Accelerate Action As Confirmed Distribution Kicks In

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Aside from Bitcoin, we are not seeing too much technical damage, but we are seeing a pick up in the volume of seeling. Moving averages will be key in the near term before we have to start looking at horizontal price support and swing lows. The Russell 2000 ($IWM) undercut its 20-day MA, but hasn't yet challenged support defined by the December swing high. The MACD is on a 'sell' trigger and +DI/DI and On-Balance-Volume will likely do the same Monday if selling continues. Friday's selling registered as confirmed distribution, which is a worry for Monday. It's the strongest index, but if this falls under $257 we would likely be looking at a new trading range bound by $245 and $270 that could last a number of months.
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The Nasdaq Redraws Ascending Triangle As Bitcoin Slumps

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There was more wild fanfare today than any real damage to indices despite Microsoft's earnings hit, and Apple's earnings to follow. We will start with the Nasdaq. I have redrawn the breakout as an adjusted 'bullish ascending triangle' rather than a 'bull trap'. A loss of ascending triangle support would bring in to play a future test of the 200-day MA, which I think the index needs, but is not guaranteed. Technicals have seen a 'sell' trigger in +DI/-DI, but other technicals are holding up well. It could get ugly if Apple dissapoints; if that happens, then the 22.2K level is the immediate concern. I'm not sure what to make of the S&P. It's a bit of a mixed bag, I have redrawn it as a skittish bullish ascending triangle, but it may just be a broader rising channel. The 50-day MA is looking like it will be key support on the next test. A loss will open up for a test of the 200-day MA. The Russell 2000 ($IWM) successfully test...
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S&P Challenges Bull Trap As Nasdaq Breaks Out

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Today it was the turn of the S&P and Nasdaq to make their moves as the Russell 2000 ($IWM) takes a rest after its breakout. The Nasdaq had the best of the action as it cleared ascending triangle resistance (although, not all-time high resistance). Technicals are net positive with a new MACD trigger 'buy' the latest bullish trigger. Volume was a little light, but price action is key.
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Bearish Evening Star for Russell 2000 as S&P 'Bull Trap' Holds

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The Russell 2000 ($IWM) fulfilled its 'bearish evening star' reversal with a gap down at the open followed by a solid red candlestick. However, despite this loss, there is still plenty of room to run to support and technicals have barely shifted from their overbought state. The Russell 2000 registered a distribution day in the process, which gives bears a strong chance of registering another win on Monday.
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Markets Rally But "Bull Traps" Hold For S&P and Bitcoin

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Markets were able to stage a recovery after Tuesday's losses, but the recovery - while newsworthy - didn't do enough to make back all of those losses, and critically, there is still a key "bull trap" in the S&P. Technicals are still mixed for this index, with momentum (stochastics) failing to return to an overbought condition, a condition required to sustain a rally.
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"Bull Traps" For S&P, Nasdaq and Bitcoin

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So, in one fell swoop, the S&P and Nasdaq undid all of the work of 2026 with nasty gaps lower. In the case of the Nasdaq, the ascending triangle breakout reversed into a breakdown with new 'sell' triggers in the MACD, On-Balance-Volume and +DI/-DI. The relative performance of the index to the Russell 2000 ($IWM) showed an acceleration lower after last year's declines. Only stochastics (momentum) is holding on. If one was to be more honest of what's happening, we are likely broadening out to a trading range and it will take a loss of 22K to really flag a concern for bulls. Things are a little more problematic for the S&P. There is a definite 'bull trap' in play following today's significant gap down. Volume rose in confirmed distribution, so this wasn't some fake out to get weak hands out of their positions. As with the Nasdaq, the twin lows of October/November at 6,550 carries greater significance, and we are still a long way from a test...
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