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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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Indices Broaden Into Trading Ranges

Not a whole lot has happened since my last update. Indices are morphing into trading ranges, minimizing the impact of some of the losses, even losses registering higher volume distribution.

The Russell 2000 ($IWM) undercut its 20-day MA on confirmed distribution. Technicals saw new losses in the MACD and +DI/-DI. Next up is the 50-day MA. Such a test will confirm a sequence of higher highs and higher lows - maintaining the rally - or confirming trading range support...

The equal-weighted S&P took over a 1% loss today as it tagged its 20-day MA and trendline support. Technicals remain net positive.

The S&P is trading inside a broader trading range, thats also a bullish symmetrical triangle. Technicals are mixed; bullish MACD and Stochastics offset by bearish On-Balance-Volume and +DI/-DI. The trade is swing trade on break of support/resistance with a stop on the flip side.

The Nasdaq is also shaping a consolidation within a larger trading range. Here, the consolidation triangle should break in the direction of the trend (higher); if trading this break, a stop goes on a loss of 25K. Technicals are bearish, so the risk for failure of this break is high.

Bitcoin got a bit of a reprieve after managing a bounce off 57.5K, that for a while, looked like it was going to fail. It followed this with a push above its 20-day MA, but it has since failed to break through 65K and at least challenge the last swing high. This is still the best shorting opportunity, but cover if there a move back to 64.5K.

There are trading opportunities across the different asset classes, but broader trends are still open for debated. Prior action (except in Bitcoin) favors bulls, but let price be your lead.

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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

Sellers Accelerate Action As Confirmed Distribution Kicks In

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Aside from Bitcoin, we are not seeing too much technical damage, but we are seeing a pick up in the volume of seeling. Moving averages will be key in the near term before we have to start looking at horizontal price support and swing lows. The Russell 2000 ($IWM) undercut its 20-day MA, but hasn't yet challenged support defined by the December swing high. The MACD is on a 'sell' trigger and +DI/DI and On-Balance-Volume will likely do the same Monday if selling continues. Friday's selling registered as confirmed distribution, which is a worry for Monday. It's the strongest index, but if this falls under $257 we would likely be looking at a new trading range bound by $245 and $270 that could last a number of months.
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