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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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Weekly Review of Stockcharts.com Publisher Charts

Another exciting week goes by; but has anyone the edge?

Anthony V Caldaro of http://objectiveelliottwave.com/ has checked this week; noting the bearish divergence in the MACD, but not changing any of his prior wave counts.


Richard Lehman of TrendChannelMagic.com points towards a flat consolidation, but worries if the mild rally doesn't make it up to larger channel resistance c1,120 for the S&P.

5/28 --Even with Thursday's huge advance, the week's action shows flatter short term upchannels than were first indicated. There are still a couple of different angles possible, but they are relatively flat and may alllow more weakness early next week before rising again. If the Dow is going to get to 10,500 and the SPX to 1120, it will now take longer at this angle (i.e. most of next week). If the indexes reverse before even reaching the upper green channel lines, it will be rather negative, as it may suggest that the green channel is accelerating downward. So, unless the momentum is going to enable an upward break, the indexes will encounter resistance fairly soon and reverse down again.

Another free copy of the Channelist Newsletter will go out this weekend. If you are not already receiving them, e-mail info@trendchannelmagic to be added.

5/27 -- Riskier groups of equities had a banner day with impressive gains of 4-5%, though all of it still in the context of a downchannel with successively lower peaks. We will very soon test the upper lines of this downchannel and see whether there is going to be a possibility of breaking north again in the short term. Essentially, XTC, XLE, XLK have already hit that upper line in one of their charts and others are not far behind. (The Dow would hit at 10,500 or so and the SPX at 1120. I think we will get some clues Friday, though I doubt there will be too much interest in being overly long over a three-day weekend.
 Yong Pan of Cobrasmarketview has gone decidely neutral (with a few bearish signals in the mix) on the short and intermediate term.


The autotrade system covered the short position and is waiting for a new signal.


Has the Put/Call Ratio to the S&P gone from one extreme to the other (now oversold)? Note also resistance line break; long side opportunity?


Yong Pan sees bulls as having the edge to push further gains based on candlestick characteristics


Michael G. Eckert of EWTrendsandcharts has labelled a 5-wave down with the third wave of the five in play. It has a downside target c925 which is perhaps one of the more bearish outlooks out there. For it to be true then 1,125 cannot be violated to the upside.


Joe Reed offers his weekly summary:


Note how oversold the Nasdaq Summation Index is - appears to be very close to a 'buy' based on Full Stochastics


So short terms still look to run bulls favour, but it's not all consensus from commentators. When markets leave oversold conditions will offer a truer measure of demand and what can be achieved by buyers.

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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

"Dead Cat" Bounce or Something Better?

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It's still a little too early to say, but the bounce is in play and "long" is the place to be. There is a huge amount of overhead resistance and the risk:reward remains tight with moves back to Thursday's lows well within expectations. For the S&P, I would be looking for a rally back to test the 200-day MA, or a fast-falling 20-day MA, whichever is the lowest. Real supply won't kick in until 5,700 is tested, and maybe it will have the juice to get to 5,775 before volume selling makes its presence felt. As the index makes this move I expect to see a decent On-Balance-Volume 'buy' signal, alongside what will be a weak MACD 'buy'; other technicals are likely to remain bearish.
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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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