Image source: PixabayWhether you see the action in the Russell 2000 over the past week and a half as a bullish ascending triangle or pennant, it’s clear there has been a significant bullish turn in momentum since the early November gap higher (on higher volume accumulation). Obviously, we can’t read too much into Black Friday’s trading, but we can see a broader bullish picture on net bullish technicals.Even relative performance against the S&P 500 looks to be turning in the bulls’ favor. The only key resistance level left to break is the 200-day MA, and it is interesting that prices have stayed consistently below since the failed attempt on the inverse hammer spike.
While the Russell 2000 appears to be set up for a bullish week, other indices reached a logical end point of their October-November rally. For the Nasdaq, a sequence of narrow range days above the August swing high has the potential to generate a ‘bull trap’ that would leave shorts with a trade (to the 20-day MA).
Likewise, for the S&P 500, we have the August swing high to play as support. However, I don’t see this former resistance level as having been sufficiently breached to think buyers will step in to defend it should sellers make a run at this level.
Another reason to expect selling in the S&P 500 and Nasdaq is that both indices have been sitting on weekly timeframe resistance.
So, we have a tale of two cities; a Russell 2000 that’s ready to break higher, and a S&P 500 and Nasdaq that are poised to head lower, at least on a temporary basis.More By This Author:Minor Losses For Indices Change Little For The Big Picture Excellent Strength Across Indices Sets Up The Coming WeekRussell 2000 Rebuffed By 200-day MA As S&P And Nasdaq Hold Gains
