It was one other quiet day for many indices, however the Russell 2000 dropped into a potential ‘bull trap’ state of affairs. The Russell 2000 skilled additional weak spot with a ‘sell’ set off within the +DI/-DI with Slow Stochastics [39,1] simply above the bullish midline – now the final line protection of the web bullish image for this index.
The Nasdaq additionally completed with a doji (just like the S&P), nevertheless it’s simply above its 20-day MA in what might be a retracement purchase alternative – regardless of the ‘sell’ set off in relative efficiency towards the S&P, or the MACD set off ‘sell’.
After the Percentage of the Nasdaq Stocks above the 50-day MA turned internet bearish on Friday, the Nasdaq Summation Index is getting near doing likewise – probably tomorrow. This will additional strain Nasdaq bulls.
Further promoting on Wednesday will probably drive the Nasdaq into a internet damaging bearish development as supporting breadth metrics really feel the ache. The greatest long run (brief) alternative will possible come from rallies within the Russell 2000, however the Nasdaq and Nasdaq 100 might additionally profit.
You’ve now learn my opinion, subsequent learn Douglas’ weblog.
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SOURCE: Fallon Financial Commentary – Read complete story here.