Russell 2000 ($IWM) Primed To Challenge 200-Day MA

The Russell 2000 ($IWM) is ready to follow the S&P and Nasdaq, both of which have breached March swing highs, and are on course to challenge all-time highs. Friday's action was particularly positive and is backed by strong technicals. The next overhead target is the 200-day MA; measure risk:reward from the Thursday swing low.

The S&P is always ready in a 'dead-mans' zone, having cleared its 200-day MA, leaving only all-time highs to challenge. Technicals are net positive with On-Balance-Volume and the MACD particularly strong, eventhough the index is underperforming the Nasdaq.

The Nasdaq is similar to the S&P in pushing towards all-time highs. It`s caught between support of its 200-day MA and February resistance. However it's outperforming peer indices and is the index most likely to break to new highs as part of the current rally.

Nasdaq breadth metrics have rallied sharply off deep oversold lows, washing out the weak hands, and leaving the index nicely primed to make new all-time highs.

Also bullish for markets is the (contrarian) low consumer confidence as measured by the University of Michigan Consumer Sentiment Index. It has reached levels below that of the credit crisis in 2008.

On a more bearish front; the reverse from a yield inversion in the 2-year may yet prelude a market top as it did in 2007 (one that emerged off a more subtle yield inversion).

Although it could prove to be a boom time for commoditites; watch for a break in the bullish wedge of the Pring Inflation:Deflation ratio.

As with the good weather forecast for Ireland this week, we need to stick with the positivity and look for continued higher prices. Markets have escaped from the clutches of crash caused by Trump's tariffs, but are not out of the woods for as long as he is President. Without understanding what he will do next, markets are left dealing only with what is known, and for now, that means higher prices.

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

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