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Upcoming "Death Cross" for Russell 2000 ($IWM)

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There was some modest buying today from the open, but volume was light and markets are below trading range support established during the latter part of 2024. It's hard to see where the buyers are going to come from given the chaos of Trump. I should add, I listened to Josh Brown's The Compound podcast and he showed an interesting chart of market returns in April-May in the year following a strong return in markets; in essence, selling to pay capital gains tax. Given the precarious nature of markets, and the possibility for this seasonal factor to play out, it's likely we have a couple more months of downward action before value buyers return. If we look at individual markets, the Russell 2000 ($IWM) is looking like the first to signal a long term shift in favor of bears with an upcoming "Death Cross" between the 50-day MA and 200-day MA - perhaps completing before the end of the week. Technicals are net bearish and the volume trend has collapsed since the st...
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Bitcoin Continues Decline As Measured Move Target Approaches

Bitcoin lost ground off its failed test of the 20-day MA. It's now pushing for a retest of the bullish piercing pattern from the start of February. In addition, it's very close to reaching the measured move target marked by the red-hashed line in the chart.

Not a lot has changed since my last update. Range bound markets are not the most exciting, despite what look like big daily shifts. Last week, in the Russell 2000 ($IWM) we had a couple of days with upper 'spikes' that denotes excessive supply. Today's gains sets up for another challenge of those spike highs tomorrow. Technicals are mixed with bullish On-Balance-Volume and Stochastics offset by bearish MACD and +DI/-DI; although with the ADX at 11, trend-driven technicals carry less weight. The index is still outperforming the Nasdaq, which may be the most bullish thing to say about the Small Caps index. There may be an aggressive short for a move above $265, but if the momentum into this price is strong, then it may be prudent to step aside or cover if already short.

The equal-weighted S&P bounced off channel support, but not before a MACD trigger 'sell'. ADX is running below 20, so the trend isn't running at the same pace as at the start of the year.

The equal-weighted Nasdaq 100 had gone from a range bound support break to a bullish 'wedge'. Technicals are net bearish but there is pending 'buy' trigger in the MACD.

Not a whole lot on offer for tomorrow. Would like to see range support or resistance challenged for lead indices, but any such move would take a few days to develop.

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

Popular posts from this blog

Upcoming "Death Cross" for Russell 2000 ($IWM)

Image
There was some modest buying today from the open, but volume was light and markets are below trading range support established during the latter part of 2024. It's hard to see where the buyers are going to come from given the chaos of Trump. I should add, I listened to Josh Brown's The Compound podcast and he showed an interesting chart of market returns in April-May in the year following a strong return in markets; in essence, selling to pay capital gains tax. Given the precarious nature of markets, and the possibility for this seasonal factor to play out, it's likely we have a couple more months of downward action before value buyers return. If we look at individual markets, the Russell 2000 ($IWM) is looking like the first to signal a long term shift in favor of bears with an upcoming "Death Cross" between the 50-day MA and 200-day MA - perhaps completing before the end of the week. Technicals are net bearish and the volume trend has collapsed since the st...
Read more

"Bull Traps" For S&P, Nasdaq and Bitcoin

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So, in one fell swoop, the S&P and Nasdaq undid all of the work of 2026 with nasty gaps lower. In the case of the Nasdaq, the ascending triangle breakout reversed into a breakdown with new 'sell' triggers in the MACD, On-Balance-Volume and +DI/-DI. The relative performance of the index to the Russell 2000 ($IWM) showed an acceleration lower after last year's declines. Only stochastics (momentum) is holding on. If one was to be more honest of what's happening, we are likely broadening out to a trading range and it will take a loss of 22K to really flag a concern for bulls. Things are a little more problematic for the S&P. There is a definite 'bull trap' in play following today's significant gap down. Volume rose in confirmed distribution, so this wasn't some fake out to get weak hands out of their positions. As with the Nasdaq, the twin lows of October/November at 6,550 carries greater significance, and we are still a long way from a test...
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Markets Rally But "Bull Traps" Hold For S&P and Bitcoin

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Markets were able to stage a recovery after Tuesday's losses, but the recovery - while newsworthy - didn't do enough to make back all of those losses, and critically, there is still a key "bull trap" in the S&P. Technicals are still mixed for this index, with momentum (stochastics) failing to return to an overbought condition, a condition required to sustain a rally.
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