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Market Drift Continues as Equal Weighted S&P Breaks Bull Trend

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The only index to mark any change was the break down in the equal-weighted S&P as it dropped out of its bullish trend into a trading range. If this is a trading range, then it finished at the first of a possible support level. If this breaks from here, then next support is the 50-day MA. Technicals are mixed with a weak 'sell' trigger on a trendless ADX, and momentum that has fallen out of an overbought state. Next target is the 50-day MA.
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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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Markets Drifting Lower

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Sellers took Friday's laurels with sizable enough gap downs for the S&P and Nasdaq. I consider both of these markets to be range bound, so the gaps are not as bearish as they might otherwise be had they occurred from a break of trend. The Nasdaq is under the most pressure as Friday's gap down has taken the index closest to support defined by the June swing lows. Even if this support is lost, there will be another level to aim for down at the 200-day MA currently at 23,877. Technicals are net bearish, with momentum not oversold. This means further selling can be exspected, but we don't have any crash conditions despite the bearishness of other indicators. One to watch.
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Bitcoin Breaks Through 50-day MA

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Not a whole lot to add from the weekend. After yesterday's action I had thought bears had regained control after previously mentioning how the index had overcome the prior bearish markers. Bitcoin pushed through the 50-day MA on lighter volume, but with the counter move against yesterday's selling it now opens up for a move to the 200-day MA.
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Pattern Breakouts in S&P and Nasdaq, as Bitcoin on Buy Signal

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The consolidations I mapped out last week for the S&P and Nasdaq, shipped breakouts move on Friday. Volume wasn't particularly high, but there were technical improvements for these indices. The breakout in the S&P saw a new On-Balance-Volume breakout to follow the early 'buy' trigger in the MACD. The index is enjoying a relative improvement over the Nasdaq.
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Indices Broaden Into Trading Ranges

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Not a whole lot has happened since my last update. Indices are morphing into trading ranges, minimizing the impact of some of the losses, even losses registering higher volume distribution. The Russell 2000 ($IWM) undercut its 20-day MA on confirmed distribution. Technicals saw new losses in the MACD and +DI/-DI. Next up is the 50-day MA. Such a test will confirm a sequence of higher highs and higher lows - maintaining the rally - or confirming trading range support...
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S&P and Nasdaq Posts Gains To Maintain Consolidation

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Both the Nasdaq and S&P posted small gains after yesterday's to keep the consolidation intact and return both indices above their respective 50-day MAs. Buying volume was down for both indices. Nasdaq technicals remain net bearish, although momentum for the S&P is bouncing off the midline - an area of support in a cyclical bull market.
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S&P Joins Nasdaq With Net Bearish Technicals

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It's not all doom-and-gloom, but there is a split between the Russell 2000 ($IWM) and equal-weighted S&P ($SPXEW) and the Nasdaq ($COMPQ) and weighted S&P ($SPX). It's still unclear which side will win out, but we can play each trade as it stands. The S&P dropped below its 50-day MA on higher volume distribution, enough so that it's now considered to be net bearish. The index is outperforming the Nasdaq, but unless there is a quick recovery this index will drift back to 7K; shorts can place a stop above its 50-day MA.
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