Russell 2000 Bulls Hope 50 DMA Support Holds; Nasdaq, S&P 500 Brace for Pullback
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IWM
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IXIC
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The Russell 2000 (IWM) has been defending its 50-day MA over the early part of 2024, but the last few days have seen a shift in this support with ‘sell’ triggers in the MACD and On-Balance-Volume.
The index is underperforming relative to the Nasdaq, but it has been a bit of a whipsaw scenario since early February.
Buyers need to dig in soon because a loss of next support at the 50-day MA spells trouble and opens up a test of the 200-day MA.
IWM-Daily Chart
The Nasdaq closed with a bearish ‘black’ candlestick that failed to challenge the March high. There are ‘sell’ triggers in the MACD and On-Balance-Volume to work off, but yesterday’s finish suggests more downside today.
COMPQ-Daily Chart
The S&P 500 closed with a doji that also failed to challenge all-time highs. As with the Nasdaq, there are ‘sell’ triggers in the MACD and On-Balance-Volume to overcome but it did retain breakout support and relative performance is improving.
Yesterday wasn’t quite the action I was looking for in the S&P 500 so caution remains advised as the outlook edges bearish.
SPX-Daily Chart
For today we will want to see a more bullish push in the S&P 500 that negates the bearishness of yesterday’s action and closes at new highs. This should help other indexes challenge their more bearish setups, although it likely won’t negate them.
