Bullish Monday Ahead? Nasdaq to Lead Charge and S&P 500, Russell 2000 Could Follow
2024.07.15 05:56
The divergence between the (), and the and continues. Thursday’s surge in the Russell 2000 on higher volume accumulation continued into Friday’s premarket and open.
However, buyers were unable to maintain their price momentum despite another day of strong buying volume. Having said that, there is plenty of room for buyers to find their foothold should sellers press late Friday selling pressure into Monday; $210 ($IWM) – the gap and prior high resistance-turned-support looks to be the area to watch.
More cautious traders could look to the S&P 500. Thursday’s selling could have led to an ugly Friday, but buyers were able to step up and hold the lows. There should be sufficient buying momentum to carry into today’s session and challenge for new all-time highs.
The Nasdaq had a similar Friday to the S&P 500, but the price drop back inside the bearish wedge is the concern. In principle, the likelihood for a Monday recovery is approximately equal between the indices, but there is more room for damage should sellers take an early advantage.
One thing to watch is the weekly candlestick for next Friday in the Nasdaq. This week’s was an indecisive doji – a doji after weeks of gains – a gap down, or a selling candlestick, would result in a reversal pattern and potentially weeks more of selling.
While Friday’s action points to a potential bullish Monday, look to the Nasdaq for a lead; a poor start here would open up the potential for a move below bearish wedge support. This might help the Russell 2000, which has benefited from weakness in the Nasdaq and S&P 500.
