Markets start 2024 near (all-time) highs

With the exception of the Russell 2000 ($IWM) we have the S&P, Dow Jones Industrial and the Nasdaq all up near all-time highs. There is the potential for some indices to return double tops, particularly if you look at Monthly charts like the S&P.

But if over the course of the coming weeks we see the 2021 high cleared (any gain over January would be enough), then the risk of the double top abates. Having said that, there really hasn't been any substantial profit taken from markets since the October rally. If we stick with the S&P, then the 50-day MA would look to be a good place to watch for a buying opportunity should 2024 start with some profit taking.

The Nasdaq hasn't extended itself as far as the S&P, so there will be more pent-up demand should sellers try to control action in this index. There is a 'sell' for the MACD but other technicals remain healthy, and selling volume is well down on recent buying.

The Russell 2000 ($IWM) has still work to do before it gets back to 2021 highs. The end-of-year saw a 'golden cross' between 50-day and 200-day MAs, marking the trend reversal in favor of bulls long since achieved for the S&P and Nasdaq. As with the latter indices, technicals are strong and selling volume has been light.

Going forward, we will be looking for the October trend to continue, but not before 'weak hands' have a chance to take their profits. The Russell 2000 ($IWM) has the best chance of attracting buyers as the "value" index compared to the S&P and Nasdaq. Let's see what happens when traders return in force next week.

Get a 50% discount on my Roth IRA with a 14-day free trial. Use coupon code fallondpicks at Get My Trades to get the discount.

---

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

Being "Right" but still losing...

Image
I'm trying the Topstep Trader Combine as a sampler to day trading and it's an interesting setup with minimal outlay costs to get started. I'm not a huge fan of their platform UI but everything else has been pretty good so far. Today was one of those days where I waiting (and waiting) for the profit taking to kick in, but by the time sellers made their appearance I had reached my loss limit for the day and so that, was that. You can see all of my whipsaw trades here. For the record, I only work off price action, looking at support/resistance and tells like rapid stop take outs, usually a good sign for a reversal.
Read more

Russell 2000 reverses off resistance

Image
The Russell 2000 ($IWM) has shaped a four month cup-and-handle pattern, but Friday's challenge of handle resistance was not enough to generate the follow through needed to continue the rally. Despite the losses, On-Balance-Volume remains on a 'buy' trigger and the MACD has the potential to offer a 'buy' trigger of its own on the next gain. However, losses did reverse relative performance away from Small Caps to the Nasdaq. The Nasdaq banked a small gain Friday on trading volume which was lighter than normal. While price action gathered little attention, there was a return to net bullish technicals with a new MACD trigger 'buy' to go alongside the earlier 'buy' signal in On-Balance-Volume. Thursday's bearish black candlestick was not good to see, but Friday didn't deliver the losses such a candlestick can deliver. I have added a support trendline that will offer itself as an additional buy zone. Momentum is strongly bullish.
Read more

Archive

Show more