Bearish engulfing pattern eats into Friday's Russell 2000 ($IWM) buying

The Russell 2000 ($IWM) has been defending its 50-day MA over the early part of 2024, but the last few days have seen a shift in this support with 'sell' triggers in the MACD and On-Balance-Volume. The index is underperforming relative to the Nasdaq, but it has been a bit of a whipsaw scenario since early February. Buyers need to dig in soon because a loss of next support at the 50-day MA spells trouble and opens up for a test of the 200-day MA.

The Nasdaq closed with a bearish 'black' candlestick that failed to challenge the March high. There are 'sell' triggers in the MACD and On-Balance-Volume to work off, but today's finish suggests more downside tomorrow

The S&P closed iwth a doji that also failed to challenge all-time highs. As with the Nasdaq there are 'sell' triggers in the MACD and On-Balance-Volume to overcome but it did retain breakout support and relative performance is improving. Today wasnt't quite the action I was looking for in the S&P so caution remains advised as the outlook edges bearish.

For tomorrow we will want to see a more bullish push in the S&P that negates the bearishness of today's action and closes at new highs. This should help other indices challenge their more bearish setups, although it likely won't negate them.


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

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