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.

Share on StockTwits

---

Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.

Follow Me on Twitter


Investments are held in a pension fund on a buy-and-hold strategy.

Popular posts from this blog

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

S&P 'Bull Trap' Prevails As Recent Challenge Fails

Image
We are two-for-two for the S&P pushing beyond 6,100 resistance - this week was nearly an exact repeat of last week - just as things looked ready to push on, sellers returned. Supporting technicals are net bullish, which leaves just price to do its thing. What happens at converged 20-day/50-day MAs will be important, because there can only be one winner here.
Read more

Friday's gap downs bring indices close to support. Semiconductor Index at 200-day MA.

Image
Friday's big gaps lower have the potential to become breakdown gaps, but for now, the near term oversell has for a possible move into the gap price vacuum. The index most likely to achieve this in the coming days is the Russell 2000 ($IWM). The Russell 2000 ($IWM) finished with a neutral doji, just above its 50-day MA and in a thick band of support between $207.50 and $210 marked by the summer swing highs. Technicals have followed price action with new 'sell' triggers in On-Balance-Volume and ADX, but intermediate term stochastics haven't reached the mid-line that is typical support in bull markets. Aggressive bulls can look for a move to test the underside of the 20-day MA. The S&P was unable to hold its 50-day MA on Friday's open, and instead found itself toying with the May swing high. More significant support is likely to be found around 5,265, so if there is an undercut of Friday's low then this will be the next port of call. More concer...
Read more

Archive

Show more