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

Trading Ranges Expand As Traders Seek Answers

Markets are reflecting the turmoil in the Middle East by being as indecisive as the Administration in its goals for the region. Headlines talk of significant declines, but that's not what we are seeing. The Nasdaq has been particularly resilient despite the added pressure from a possible AI bubble. I have marked in declining resistance from January, that intersects with today's close, and marks a possible short trade (stop on a close above today's nasty looking spike high). There is a weak 'buy' signal, but other indicators are bearish, despire the sharp acceleration in relative performance to the Russell 2000 ($IWM).

After yesterday's bullish engulfing pattern in the Russell 2000 ($IWM) we now have the hangover with the "gravestone doji", although its significance is reduced as the index is not overbought. It's a shorting opportunity, particular as the index failed to close above $255; stops on a volume move above $258.

The S&P finished with an indecisive spinning top at former support, now resistance. Resistance is well defined from within the trading range and a move to push into yesterday's candlestick seems likely. A test of the 200-day MA can't be ruled out, but the larger reality is that a larger trading range will be established with new support at 6,550.

The equal-weighted S&P came close to tagging 7,800 support, that itself could become next trading range support. Technicals are net negative, but not oversold, although a test of 7,800 would likely coincide with a move into an oversold state.

The long trade of choice is Bitcoin. What had looked to be a 'bull trap' is now evolving into a challenge of its 50-day MA. If it can get past this moving average it will open up for a move to the 200-day MA and/or $85K. Technicals are mixed and the MACD has done well to sustain what is a weak 'buy' signal. The cryptocurrency has halved in value since peaking last year, so odds favor upside from here.

We have potential short trades for lead indices and a long opportunity in Bitcoin. Take your pick.

---

Follow Me on Twitter


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

Image
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...
Read more

Markets Rally But "Bull Traps" Hold For S&P and Bitcoin

Image
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.
Read more

Archive

Show more