Large Caps turn south; Russell 2000 remains range bound

We are seeing more definition in the trend direction for some indices, but even with Friday's losses, a more likely outcome for the weeks ahead is sideways trading with May lows a potential support anchor for this.

The S&P undercut its 50-day MA on Friday's close on higher volume, although options expiration will have weighed on the volume.  May's swing low is next, which if held would mark a new level of support for my suggested trading range. 

The Russell 2000 had also taken a big hit on Friday, but it's already range bound so Friday's action just extended this.  It did contribute a MACD 'sell' though. 

The Dow Jones may be a marker for what is to come for the S&P.  It didn't find support at May swing lows and finished very weak Friday having long cut through its 50-day MA. Next support for this index is likely around 32K, perhaps in conjuction with a test of the 200-day MA. 

The Nasdaq is doing the heavy lifting and took a modest loss, while remaining near its highs.  Technicals are net positive, but Friday's action registered as distribution.

Heading into the week, we will want to see how the Nasdaq responds to the pressure around it.  In terms of future support, the Dow Jones is the index to watch to see where others may follow. 

You've now read my opinion, next read Douglas' blog.

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