There is an interesting setup coming for the Russell 2000 ($IWM) Today's action saw a move back into last week's breakout gap that registered as a breakdown from its narrow handle, BUT, retained the characteristics of the breakout by remaining above $270. In addition, we have a fast approaching 20-day MA that could provide a cue for buyers to step in. Technicals remain net bullish, although today's volume registered as distribution. While I tend to be a 'glass-half-full' person, I am leaning here towards a possible 'bear trap' that should resolve tomorrow; if we see buyers step in after the first half-hour of trading (when the likely direction for the market that day is established), then it might be worth a long play.

Nothing really to add from the weekend, but the one chart that is leaving me confused is the University of Michigan Consumer Sentiment Survey. Consumer sentiment is in the toilet, really in the toilet - no surprise really given tariffs and general Administration f*ckisms - but the market has been pushing new highs rather than pivoting to new lows as has happened in the past.

Indices continued to post gains but the Russell 2000 ($IWM) remains in the process of consolidation. The index is shaping a bullish handle which offers a nice risk:reward play for those looking to play the break. Volume has been light across the pattern and well below that of the March capitulation, and below even that of the early year advance. The equal-weighted S&P is attempting a 'bull flag', although it's a little scrappy. Technicals are net bullish but its underperforming relative to its weighted average and this weakness is expanding. The S&P edged a breakout of its small handle, which gives an indication that the equal-weighted S&P should follow suit on the break of the 'bull flag'. The only caveat is the edged breakout lacked sufficient consolidation to shake out the weak hands, so it leaves the move vulnerable to volume selling. The Nasdaq finished Friday on higher volume accumulation after a successful defense of the break...

After the rejection at resistance it would have been easy for the equal-weighted S&P to come back to its moving averages. However, today's close delivered a bullish dragonfly doji, although momentum is overbought which means it's not a reversal candlestick. Given the proximity to resistance it's well placed to deliver a breakout following the lead of weighted the S&P. Technicals are net bullish, but there is still significant underperformance against the weighted average.

It's of no coincidence that when sellers appeared for the equal weighted S&P they did so at resistance. Today's candlestick at all-time resistance was almost a bearish enfulfing pattern with a spike high penetrating resistance. Given the weighted S&P had already broken to new all-time highs, the guidance here is for equal-weighted S&P to follow suit. BUT, if the weighted S&P undercuts breakout support to leave a 'bull trap', then much worse is likely to follow.

Friday delivered a solid move higher across indices. The Russell 2000 had the best of the action with a breakout gap higher on confirmed accumulation. The only negative is the relative underpeformance to peer indices. It's just a question what spanner Trump wants to throw at the indices; next week could be a long week.

It's no coincidence to see indices start to slow their gains as resistance approaches. This was best represented by the Russell 2000 ($IWM) as the advanced got squeezed and the net gain on the day was minimal (Futures suggest a modest start, no big breakout yet). The breakout could happen before the week is out, but the gap moves we have seen will act as a draw to be filled, so don't be surprised if we a move back to Tuesday's gap higher. Technicals for the index are in good shape, although volume is a little disappointing.

Markets have done well to hold the sizable gaps after version 1 of the US-Iranian ceasefire, and if there is reason for optimism, it's that markets are exepecting a version 2 of the ceasefire relatively soon(?). The Russell 2000 ($IWM) returned to a net bullish technical state as the base breakout is on the way to challenging $270. Since the test of the 200-day MA there hasn't been an opportunity for 'value' buyers to step in on a pullback. This might happen when $270 is tested.

If you a follower of JC Parets you would be looking at a (very) bullish market outlook. I would be more cautious, but today's action has done much to negate some of the lingering bearishness from yesterday. However, markets in a trading range should be considered neutral until all-time highs are breached, but long term investors can accumulate. The Russell 2000 ($IWM) gapped higher yesterday, but closed with a bearish black candlestick. However, today's buying managed to createa a bullish engulfing pattern to negate the bearish black candlestick. In addition, yesterday's gap created an "island reversal" which is a significant (bullish) reversal pattern. Note, this gap can't close for the pattern to be true. Technicals are improving with a 'buy' trigger in stochastics to match earlier ones in On-Balance-Volume and MACD.

So we have markets coming to (or just beyond) resistance and a Trump deadline for Iran. Consequently, we are in position to see a sizable move tomorrow. Those markets that have broken resistance are signalling towards a positive outcome (or perhaps, a kick-the-can deadline for Iran). But if news is bad and we gap away from resistance, then many markets will be back at 200-day MAs. The Russell 2000 ($IWM) is approaching converged resistance from $255, declining resistance and 50-day MA. Today's buying was on low volume, but counts as relative "accumulation" and marks itself as a possible bottom breakout.

Markets swung back towards buyers, although there is plenty of work to do before we can call a rally. Best of the action was the S&P as it cleared declining resistance but has still to challenge its 20-day MA. There was a new 'buy' trigger in the MACD, but it's a very weak signal given the indicator is swimming below the MACD zero line.

The positivity generated by yesterday's buying found itself under pressure today as 'gravestone doji' and 'inverse hammers' dominated. The good news was that support from weekly charts held and there is enough of a gap to offer a few days of wiggle room before sellers return. The problem is we should see selling tomorrow if these candlesticks play to form. The bearishness of these candles is negated by a close above today's highs. The Russell 2000 ($IWM) is perhaps the most vulnerable as it finished with the 'gravestone doji'. However, the recovery of the 200-day MA should give some grounds for optimism, and there were new 'buy' signals in the MACD and On-Balance-Volume. There appears to be a buyer around $243.75, so pay attention to volume action near this price level.

There is one thing a chaotic Trump can't control and that's the market, and the market is not pricing for good news any time soon. What good news there is, is that this decline is likely to lead to a good buying opportunity, similar to one last seen in April 2025 (as per the tables visible at the end of every post; if you just follow these signals you would be catching most of the major lows). We are only at the start of such a decline, but it's one I will be tracking. The strongest index is the Russell 2000 ($IWM). It only just undercut its 200-day MA, and may yet defend this moving average, but it has a tough fight ahead of it. Technicals are net negative, but it's outperforming the Nasdaq, and posted a distribution day yesterday. If this does manage to recover it will set up a bounce opportunity and will be one of the few buying opportunities, but to do so, it has to close above its 200-day MA, ideally on a bullish hammer or similar reversal candlestick.

It's hard to know what will come next as some markets work bounces off their 200-day MAs, while others struggle below it. The Russell 2000 ($IWM) successfully managed a test of its 200-day MA before rallying, while also leaving a 'bear trap' at $245. Buyers who took advantage of $245 will be sitting pretty, although traders with a shorter time frame may wish to site this out. Today's test of the 20-day MA may instead offer a shorting opportunity, particularly if there is a gap down on Thursday's open. Technicals are slowly recovering, although the MACD trigger 'buy' is a weak signal given the crossover below the bullish zero line.

It was an interesting finish to Friday; some indices successfully tested their 20-day MAs - others did not. Pure technical traders could have taken a pop on Friday in the Russell 2000 ($IWM), and equal-weighted S&P ($SPXEW) at their 200-day MAs, knowing that other lead indices were undercutting their 200-day MAs, but it would be a big ask in the age of Trump (unless you were insider trading). Well, markets reacted positively to the announcement that Trump wasn't going to bomb Iran's energy infrastructure, but over the course of the day the majority of market participants didn't believe him, and sellers returned in force. The Russell 2000 ($IWM) managed a picture perfect tag of the 200-day MA on Friday, but on Monday, the higher volume accumulation racked up by the close of business came with a sizable inverse spike.

After yesterday, I was looking for big red candlesticks across indices, and today - they delivered. Those who took the opportunity to go short can place a stop at yesterday's close. The Russell 2000 ($IWM) experienced a higher volume distribution day on net bearish technicals. Today's loss finished on $245/6 support, but another day's worth of selling will open up for a test of the 200-day MA and maybe a potential follow through move down to $228.

Not Good. Indices remain under pressure after selling into support has only resulted in a weak bounce. It won't take much to tip the S&P, Nasdaq and Russell 2000 back into the red. The Russell 2000 ($IWM) is the canary in the coal mine. Today was a second narrow doji after Monday's. Volume was down, reflecting the disinterest by buyers. Technicals are net negative and last week's gap down has finally closed. Don't be surprised if we see a solid red candlestick before the week is out. Even if there is a rally, the 20-day MA will be there to add its own pressure.

The problem when you trade off what Trump says, is that you are only in for disappointment. Monday's reversal that delivered what should have been a tradeable bullish engulfing pattern has devolved into a distribution sell off across lead indices. The Russell 2000 ($IWM) gapped down but was at least able to hold onto $245 support. Technicals are net negative, but not fully oversold, so I would be looking for another day of selling that should take it into a test of its 200-day MA.

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).

It was not a guaranteed thing, and if Monday sees gains (unlikely), then a bear trap can't be ruled out. It was not a wholesale disaster, but it will set the tone for the week. The Russell 2000 ($IWM) gapped down but wasn't able to build on the opening loss. The end-of-day finish as a doji leaves it in a bit of a no-mans land, but if there is a gap higher and a closing white candlestick tomorrow, then we have a bullish morning star reversal pattern. Stochastics (momentum) is not entirely oversold, which you would like to see for a reversal pattern. Technicals are now net negative, so it does point towards further losses, but do watch for an opening gap higher that could offer a long trade.