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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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Ignore The Headlines, Markets Are Still Rangebound

The Iranian war has flagged extreme headlines, but markets haven't broken from their trading ranges bar a few exceptions.

The Russell 2000 ($IWM) is the most bullish of the indices. The index successfully defended $255 support but did finish the day below 50-day MA support. Technicals are still mixed, with momentum (Stochastics) likely the next indicator to switch bearish, which would make bears favorite overall.

The S&P spiked below 6,790 support before staging a recovery to close above this (real-body) support line. Technicals are net bearish, but the spike low should mark a point of demand. However, if tomorrow, the index closes within the range of the spike low, then all bets are off. Aggressive traders could look to play a long trade off the open, but if gains fail to build earlier then I wouldn't stick around.

It was a different story for the equal-weighted S&P. This posted a clear breakdown from the rising trend, but did manage to successfully defend its 50-day MA off a spike low. As with the regular S&P, if the index trades inside the spike range tomorrow, then there is a good chance for a loss of the 50-day MA.

The Nasdaq is alsow holding range support and has its 200-day MA not far away. Technicals are net bearish. There isn't a whole lot of support to work with below its 200-day MA, but there should be good support here. This looks like a long trade, but don't hold on a loss of $22K.

I haven't posted a weekly chart in a while, but it might be worth paying attention too now that war is in the air. The S&P has the potential for a rounding top, but it will take a few weeks for this to play out - enough.

Bitcoin hasn't broken support and has so far managed to stay above its 20-day MA. I think there is a decent long trade here too, despite the generally bearish technical picture.

Semiconductors could have the most to say as their recent exposure has broght them into the limelight. The measured move target was deftly reached and the index now sits on its 50-day MA.

Given global events it has been surprising how resilient markets have proven to be. Aggresive traders can use support tests to play for a move to test channel resistance, or even wait for a breakout. However, as this war is likely to last a while, I would look for bears to take control of the markets over the coming weeks and months. But as long as markets remain within current trading ranges, all the headlines you read of collapse is just noise.

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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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