Russell 2000 ($IWM) "ascending triangle" squeeze, with the Nasdaq and S&P struggling
If there is a swing trade with plenty of tension ready to snap, it's in the Russell 2000 ($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 $187-189 in a likely continued evolution of a time-based, sideways consolidation.
It's a bit of a different story for the Nasdaq as it returns to its breakout price on a move to challenge its 'bull trap'. This index has already broken trendline support, and the small doji at resistance points to trader indecision. I would be looking for further losses with the MACD accelerating downwards. On-Balance-Volume is holding on, although momentum has finally dropped out of its overbought state; another indicator that the prior bullish trend is done.
The S&P is a similar precarious state as the Nasdaq, having also experienced a MACD trigger 'sell', but now looking at weakness in On-Balance-Volume with a 'sell' trigger too. Momentum is more bullish than for the Nasdaq and Russell 2000, but this has just dropped out of an overbought state.
Going forward, I would be looking for the development of sideways (time) consolidations for both the S&P and Nasdaq, and this is likely to have the knock on effect of delivering a breakdown from the "ascending triangle" in the Russell 2000 ($IWM).
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Investments are held in a pension fund on a buy-and-hold strategy.
