Daily Market Commentary: S&P and Russell 2000 'Bull Traps'
Somewhat inevitable events in the Ukraine were going to nix the nascent breakouts for the S&P and Russell 2000. The net sum is to drop these indices into broad trading ranges for which a move to support (the January low) is perhaps the next move. A stop at a break of 'bull trap' highs is the protective stop.
The Russel 2000 is also presenting a shorting opportunity. Again, the 'bull trap' high is the stop, and January lows are the target. The fly in the ointment is converged channel support, and 20-day and 50-day MAs which will offer bulls a chance to fight back. Taking partial profits on such a test would give the larger trade some wiggle room.
The Nasdaq is the only index not to lose breakout support. If buyers are looking for a bounce, this is the index to play.
The Ukraine situation will probably keep markets muted until there is a clearer resolution. But Russians cutting gas flow to European markets would be a different story.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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The Russel 2000 is also presenting a shorting opportunity. Again, the 'bull trap' high is the stop, and January lows are the target. The fly in the ointment is converged channel support, and 20-day and 50-day MAs which will offer bulls a chance to fight back. Taking partial profits on such a test would give the larger trade some wiggle room.
The Nasdaq is the only index not to lose breakout support. If buyers are looking for a bounce, this is the index to play.
The Ukraine situation will probably keep markets muted until there is a clearer resolution. But Russians cutting gas flow to European markets would be a different story.
---
All Contributions Welcome - Thank You!
Follow Me on Twitter
Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
You can read what others are saying about Zignals on Investimonials.com.
JOIN ZIGNALS TODAY - IT'S FREE!