S&P 500, Nasdaq Eye Resistance Test; Russell 2000 Holds Support: What Comes Next?
2023.07.21 03:31
Including channel resistance in charts can be a bit of a mixed blessing. On one hand, it gives an indication as to when sellers can be expected to make an appearance in a rally. On the other, it can force you out of a position right before a rally accelerates.
The is underperforming relative to the (), and yesterday’s doji made a picture-perfect tag of channel resistance that delivered with selling today. If one were to look where buyers might come back, the 20-day MA is looking like a good place to start; a bounce here would put a squeeze on a channel resistance breakout and an acceleration of the current rally.
SPX Daily Chart
The is in a similar predicament to the S&P 500, working off the 20-day MA as it looks to challenge for a channel resistance breakout. Technicals are net bullish, but the index has started to underperform relative to the S&P 500.
COMPQ Daily Chart
The Russell 2000 ($IWM) hasn’t got the maturity in the rally that the S&P 500 and Nasdaq enjoy, so today’s selling hasn’t honored the nascent channel I have drawn. Having said that, I’m far more interested in seeing the $189 breakout support hold than the current channel.
IWM Daily Chart
Blog traffic is well down on my normal baseline traffic, reflecting the large number of people enjoying vacation time in a (relatively) Covid (remember Covid) free summer. Given that, I would not be expecting any major changes in the indexes until post-Labor Day in September.
