S&P 500, Nasdaq Bulls Set to Remain in Charge; Russell 2000 Eyes 200-Day MA Test
2024.07.05 04:06
The divergence between the , and continues to grow. The former indexes are accelerating in their bullish trend while the Russell 2000 wallows in itself.
Having said that, it’s not all plain sailing. The S&P 500 hasn’t yet reversed the ‘sell’ trigger in the MACD, but it’s getting there.
The Nasdaq went a step better with a return of the ‘buy’ signal in the MACD. On a cautionary note, there is a convergence of a possible bearish wedge, which if true, should have sellers make an appearance today.
The Russell 2000 () remains in a rut. For an investor, this isn’t a problem, but for a trader it’s a bit of a mess.
I think it needs to test its 200-day MA, if only to offer a catalyst for a reaction. Interestingly, stochastics have consistently remained below the midline, even as the index staged a small rally inside its trading range.
The ($INDU) is running a pattern similar to the Russell 2000 ($IWM), but does at least have the benefit of net bullish technicals.
It’s interesting to see it run closer to Small Caps than Large Caps, but I would give it a greater chance of challenging all-time highs than the Russell 2000.
For today, look for a pause in the Nasdaq with perhaps a neutral doji or narrow-range day candlestick. If sellers do come in, the Russell 2000 ($IWM) would be the most vulnerable to take a hit, but given its trading range, it may end up been a scrappy loss.
