The S&P was most affected by the presence of converged 20-day and 50-day MAs as it finished Monday with a neutral 'doji' just below these moving averages. The small gain was enough to generate a new 'buy' trigger in On-Balance-Volume, but the critical mid-line in Stochastics continues to play as resistance, and this means the bearish outlook is favored. For Tuesday, I will be looking for some downside, but if the S&P can close with another neutral candlestick - and not a big red one (or something better) - then we may have a more bullish response by end of week.

There wasn't a whole pile of buying volume to go with gains, but the Nasdaq, S&P and Russell 2000 ($IWM) all did their bit to keep the nascent bounce going. It has the look of a zig-zag like bounce, but until we see the "zag", these indices gains are set to challenge March highs. Traders have Thursday's lows for assessing any risk:reward longs for the coming week, although if we were to head down there this week it would probably amount to the start of the "zag". Of the three lead indices, the bounce in the Russell 2000 ($IWM) looks to offer the best risk:reward. Technicals remain net bearish, and the move out of oversold stochastics is one I would view with more skepticism than optimism (I want to see a mid-line cross in stochastics to be more confident of a long term bullish recovery), but if it can make a higher low and stay above its 200-day MA it's an attractive option for longs. The Nasdaq has a much larger differential between Frida...

The relief bounce for indices finally hit the first potential reversal point with 'black' candlesticks in the S&P and Nasdaq, and a bearish harami cross for the Russell 2000 ($IWM). Trading volume in the Russell 2000 was lighter than previous days, a positive sign for those looking for more from this bounce. Momentum indicators have moved out of an oversold state, although I like to see a cross of the mid-line before I consider the situation to be under the control of bulls. The S&P closed the day with a more bearish 'black' candlestick, a common reversal candlestick on a bounce, but more so at a new high. Technicals are weak and net bearish that increases the chance for a bearish reversal. Watch for a gap down on the open. It was a similar story for the Nasdaq as for the S&P; a bearish 'black' candlestick on net bearish technicals. If indices do start heading lower, watch for the measured move targets which for the Nasdaq and ...

The Russell 2000 ($IWM) has been guiding towards this, but the positive reaction in the Nasdaq and S&P following Friday's gains in the Small Caps index is not enough to suggest a swing low is in place for these indices. For starters, buying volume was light and momentum remained firmly oversold. The S&P did offer an opportunity at the 50% Fib retracement, and Fib zones give the best indication the decline has found a sustainable low, or at the very least, not one prone to further panic selling.

The divergence in the action between the Russell 2000 ($IWM), and the S&P and Nasdaq continues. If the Russell 2000 could go on to tag its 200-day MA, particularly if it's done on a bullish reversal candlestick, then there would be a good trade opportunity on offer here. Even a rally from here might be enough if there is a tight stop.

While it wasn't the recovery I would have liked, the Russell 2000 ($IWM) managed to resist extending its losses. The index did record a loss, and volume was confirmed as distribution, but I would be a little more optimistic going forward; albeit, a test of the 200-day MA remains favored.

Monday's selling left no doubt as to who's in control of markets. The real disappointment was how little the 50-day MA played as support given how long ago it was last tested. Instead, we are are left looking at alternative support levels for buyers to step in. The S&P moved to a net bearish technical picture after months of been net bullish. It's unclear where support may come in so I have included Fibonacci retracements as a guide. Interestingly, today's narrow range day occurred at the 61.8% retracement line, so we may see some bounce (likely, not much) tomorrow. The 38.2% zone is also near a January peak (and successful support test in February), so if there is no bounce tomorrow, then the 38.2% zone is likely next.

Introduction It will take a few days for markets to digest recent economic news, but it was clear before any announcements were made this week that the rally from October lows had stalled, and markets have now entered a new phase.  The S&P had broken its upward trend on the early week releases of CPI data and FOMC Meeting Notes, but had managed to rally back on positive news from Apple and Amazon. And while the S&P enters a tug-of-war period between bulls and bears, its still 10% above last summer's peak, and 25% above the lows of last October. A breakdown doesn’t necessarily mean a bear market is about to begin, it could simply be the slowing of its prior advance, and more likely, the start of a sideways shift in the market. Image: Stockcharts.com S&P long-term chart Investors will always fear the crash, but one only has to look at a long term chart of an index to see how these declines have ultimately just been pauses as part of a longer advance.  Image: Google F...

I'll cover daily charts during the week, but I wanted to look at the weekly picture. Friday was an ugly day on daily timeframes, but weekly charts are holding up well. The Nasdaq is the in the early stage of a rolling top, but I would be looking to the 20-week MA to attract buyers, although in August 2023 this moving average only offered brief support befoer it was breached.

Today belonged to the Nasdaq with Apple and Amazon key contributors to these gains. The index is now challenging the 'bull trap' after recent struggles. Again, we are likely looking at sideways action, but if there is follow through over the coming days it will mark a confirmed follow through for the index.

Markets threatened a rout after sellers struck at Tuesday's open, but a rally after the hour managed to right the ship and by the close of business lead markets where showing "dragonfly doji" candlesticks. A dragonfly doji is typically a bullish reversal candlestick, but only in the context of an oversold market which is not the case here. Of course, later today we have a slew of economic data that could deliver dramatic swings in the market (both ways), so there is a certain level of pent-up tension leading into this. With that in mind, we have a Russell 2000 ($IWM) that continues to feel the squeeze as the ascending triangle trendline squeezes into breakout resistance and the March "bull trap". Trading volume has been very tepid over the last few days - typical of a consolidation - so look for this to pick up when support or resistance is broken.

If there is a swing trade with plenty of tension ready to snap, it's in the Russell 2000 ($IWM). The index looks poised to either negate the late March 'bull trap', or crack below ascending triangle support with a big, red candlestick. Technicals still favor bulls, although the earlier MACD trigger 'sell' is a bit of a concern; note, MACD 'sell' triggers that occur above the MACD zero line are at best, weak 'sell' signals - often a good time to sell covered calls rather than offload a position. On-balance-volume continues to trend higher, and momentum as measured by stochastics is firmly above the 50 mid-level.. If there is a break of the trendline, then look for a move back to $187-189 in a likely continued evolution of a time-based, sideways consolidation. It's a bit of a different story for the Nasdaq as it returns to its breakout price on a move to challenge its 'bull trap'. This index has already broken trendline support, and...

There wasn't much volume to Friday's trading, but there was enough to see buyers come in a trendline support in the Russell 2000 ($IWM). There was no technical change to the index with only a whipsaw signal in relative performance against the Nasdaq, although the MACD remains on a prior 'sell' signal.

It was a setting up to be a low key day, but come the afternoon, sellers pounced and drove markets down hard after doubts raised on future rate cuts. Fed news wasn't the key takeaway, but the loss of support was. The S&P was hardest hit, not because of the percentage loss, but because of the volatility relative to recent trading action. Today marked a clear breakdown of trendline support. It should be noted, the presence of the 50-day MA offers a point of defence but today's loss does not mean we will see a crash; a time-led consolidation seems more likely. Technically, the MACD accelerated its losses and there was a fresh 'sell' in On-Balance-Volume.

Not for the first time, we have markets edge a breakout before dipping below breakout support. While indices experienced heavier than typical selling on higher volume distribution, for the Russell 2000 ($IWM) this amounted to a retest of cup-and-handle support, and a trend test for the Nasdaq and S&P. If there was a risk of something worse, it was the potential breakdown in the Nasdaq rising trend. This breakdown will be confirmed if the index fails to recover by the close of business tomorrow. The S&P finished right on trendline support, and for day traders is the best call for a long opportunity tomorrow. The rising trend remains our friend until proven otherwise. While today's losses look damaging on paper, the opportunity on offer is one for buyers. --- Follow Me on Twitter Investments are held in a pension fund on a buy-and-hold strategy.