Tests of 20-day MAs for Russell 2000 ($IWM) and S&P ($SPX)

The Russell 2000 ($IWM) and S&P ($SPX) both finished near their respective 20-day MAs registered as test "fails", but not enough to suggest a recovery isn't possible tomorrow. The Russell 2000 does have the August swing high to lean on should it need it. Also, the closure of the December gap can be one to spark a recovery.

The S&P lost ground against its 20-day MA similar to the Russell 2000 but the spike high into the 20-day MA suggests that there is more supply there than today's action was able to consume. Let's see what tomorrow brings, but expectation is for more selling.

The Nasdaq was not so lucky having previously lost support of its 20-day MA a day earlier. There is trading range support from November to lean on which could be worth looking at as a buying opportunity.

While indices have failed suppport at their 20-day MAs and finished where they opened, there wasn't any significant loss beyond opening levels. I would be watching for gaps higher tomorrow.

As an aside, it has been a bad last few days of my Topstep trading experiment. I have been trying to catch a knife on finding the lows for a bounce (not good...) and have been whipsawed by the tight stops leading into my daily loss limit. Trying to trade futures in the Nasdaq and Russell 2000 was too much.

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