Russell 2000 ($IWM) Morphing Into Double Top

The Russell 2000 had created a resistance break in the move back to the July spike high, but today's loss ended that, opening up the possibility for a double top. Confirmation won't come until there is a loss of $205, and technicals are net bullish. There is also price support in the nearby 20-day and 50-day MAs.

Things are a little clearer for the S&P. Last week's breakout is still in effect and technicals are net positive. Today's action was narrow and effectively kept things under the radar while lurking at all-time highs. It needs follow through, but no hurry.

Like the S&P, the Nasdaq had a quiet day. It's still a few weeks from challenging the July high, but bulls can remain optimistic. Technicals are net positive and the index is outperforming both the Russell 2000 and S&P.

One thing to watch is the Nasdaq Summation Index ($NASI). It has come up against historic peak resistance that is slowly rolling over as a top. Historically, this indicator can get to 500, but at 100 - prior peaks - it's decision time.

For tomorrow, watch what the Russell 2000 does. It's the only index pointing to weakness and it looks like the S&P and Nasdaq are waiting to see what happens. Given the Russell 2000 has already had four consecutive down days it's due at least one day of buying.

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

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