S&P 500 Strength Opens Door for Russell 2000 to Break Double-Top Pattern

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S&P 500 Strength Opens Door for Russell 2000 to Break Double-Top Pattern

While Small Caps typically lead markets, it’s currently the doing most of the work. Yesterday’s action saw the index move towards a test of breakout support without going all the way.

The price action confirmed that there is high volume demand – marked by accumulation – and that buyers appear prepared to defend the 5,670 support level. Technicals are net bullish, another tick in the ‘defend the breakout’ column.data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

The buying in the S&P 500 has given the () a chance to mount a new challenge on $225 resistance.

I had mentioned the likelihood of a double top for this index. I might have seen action favoring a double top coincide with a test of 20-day/50-day MAs, and this hasn’t happened.

Instead, buyers have attempted to mount a challenge in the absence of any clear prior buyer support. If we see the current move higher tag $225 I would be very optimistic of higher prices to follow.data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

Nasdaq Breakout ******** Intact Too

The Nasdaq hasn’t challenged its July high but continues to move towards 18,670 as part of the September resistance breakout. Technicals are net positive, and the bearish ****** candlestick from Thursday still has a chance of been negated.data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

Even supporting bready metrics are swinging back in favor of bulls; for example, the Percentage of Nasdaq stocks making new 50-day MAs highs is close to a new high if it can climb above 54%. This will set up the parent Nasdaq for further gains.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

For today, we will want to see the S&P 500 maintain its breakout so it can help the Russell 2000 ($IWM) reverse the developing double top. The Nasdaq is doing its own thing, but is likely to take a little longer to report a new all-time high as the channel breakout looks firmly intact.

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#Strength #Opens #Door #Russell #Break #DoubleTop #Pattern

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