Russell 2000 on the verge on new low in July - October decline

It was a tricky Friday for the Russell 2000 ($IWM) as the index experienced additiional losses to take it on the verge of a new low for the decline initiated in July. The MACD is still holding to its 'buy' trigger (a weak 'buy' as it occurred below the bullish zero line), and at least volume didn't register as distribution, although that's about all you could be positive about.

The Nasdaq and S&P both took heavier losses that they experienced on Thursday, but both are holding to breakout support. Stochastics [39,1] have been rebuffed at the mid-line, effectively confirming a bear market high from last week. Further losses from here will set up a test of the September swing low.

It was a similar story for the S&P ($SPX) as stochastics were also rebuffed at the mid-line. A loss tomorrow would reverse the breakout and likely deliver new 'sell' triggers for the ADX and On-Balance-Volume, adding fresh pressure for a retest of October lows.

In all likelihood, we are looking for losses across the indices, delivering damning blows with new lows for the Russell 2000 to go with breakout reversals in the Nasdaq and S&P.

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

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