Russell 2000 in an Ascending Triangle Squeeze as S&P 500, Nasdaq Struggle

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Russell 2000 in an Ascending Triangle Squeeze as S&P 500, Nasdaq Struggle

If there is a swing trade with plenty of tension ready to snap, it’s in the (). The index looks poised to either negate the late March ‘bull trap’, or ****** below ascending triangle support with a big, red candlestick.

Technicals still favor bulls, although the earlier MACD trigger ‘sell’ is a bit of a concern; note, MACD ‘sell’ triggers that occur above the MACD zero line are at best, weak ‘sell’ signals – often a good time to sell covered calls rather than offload a position.

On-balance volume continues to trend higher, and momentum, as measured by stochastics, is firmly above the 50 mid-level. If there is a break of the trendline, then look for a move back to $187-189 in a likely continued evolution of a time-based, sideways consolidation.

It’s a bit of a different story for the as it returns to its breakout price on a move to challenge its ‘bull trap’. This index has already broken trendline support and the small doji at resistance points to trader indecision.

I would be looking for further losses with the MACD accelerating downwards. On-Balance-Volume is holding on, although momentum has finally dropped out of its overbought state; another indicator that the prior bullish trend is done.

The is in a similar precarious state as the Nasdaq, having also experienced a MACD trigger ‘sell’, but now looking at weakness in On-Balance-Volume with a ‘sell’ trigger too. Momentum is more bullish than for the Nasdaq and Russell 2000, but this has just dropped out of an overbought state.

Going forward, I would be looking for the development of sideways (time) consolidations for both the S&P 500 and Nasdaq, and this is likely to have the knock-on effect of delivering a breakdown from the “ascending triangle” in the Russell 2000 ($IWM).

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#Russell #Ascending #Triangle #Squeeze #Nasdaq #Struggle

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