It was a hard fall, but one day does not a bear market make. The Nasdaq took the biggest hit on the day breaching the bearish wedge, but on lighter volume. The index closed below the 20-day MA, but there is a chance for swing traders to trade a move back to 18,500 if we a see a bullish doji or hammer tomorrow by the close. There is a weak ‘sell’ trigger in the MACD.
The S&P gapped down like the Nasdaq but it’s 50 points away from the 20-day MA which leaves its vulnerable to further selling without an alternative support level to lean on.
The Russell 2000 (IWM) had attempted an early gain but soon found itself dealing with the selling in the Nasdaq and S&P. The inverse doji collectively created a bearish harami cross with yesterday’s candlestick, one of the more potent reversal candlestick patterns. Because of prior gains, supporting technicals remain net bullish and are some way from an immediate reversal, so if we do see a gap down in price tomorrow, the resulting decline will likely be short-lived.
For tomorrow, look for early weakness in the Russell 2000 (IWM), but if there is no significant follow-through lower, then look for a successful hold of the 20-day MA in the Nasdaq by close of business.More By This Author:Russell 2000 Kicks On Again With A Bright Start To Week Russell 2000 Falters Despite Strong Opening Gap Russell 2000 Surges As S&P And Nasdaq Head South
