The Nasdaq edged over bearish wedge resistance, also on the back of a new MACD trigger ‘buy’. The index is more vulnerable to a reversal as a cut below wedge support would likely deliver a greater loss than a similar breach in S&P support.
The Russell 2000 (IWM) experienced a scrappy day. The 20-day and 50-day MAs have both converged, but neither can play as consistent support. I think this needs a larger move to the 200-day MA before buyers can work something. Slow stochastics continue to drift lower below the bullish mid-line.
I will be watching Nasdaq breadth metrics closely. There may be one more leg up before the inevitable downswing emerges. We do have a new secular bull market as long as the Nasdaq an stay above 16,500, but even a drop below this would only slow the advance. Should the latter happen, then I would be looking for oversold breadth metrics to signal a bottom.
For tomorrow, I will be looking for pre-market downside for a probable gap down in the S&P and Nasdaq. If pre-market holds, then buyers will have the opportunity to create an opening gap to new highs, although it does seem like sellers have the edge. The Russell 2000 ($IWM) remains a mess and I don’t expect much from it in either direction.More By This Author:S&P And Nasdaq Continue To Diverge From Russell 2000 S&P And Nasdaq Continue To Make The Running Late Selling Sends Markets Below Their Friday Open Price
