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Russell 2000 Lags Behind, Nasdaq and S&P 500 Eye Breakout

Published 05/02/2023, 03:22 AM
Updated 07/09/2023, 06:31 AM
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There really wasn't much wiggle room for markets without delivering breakouts for the Nasdaq and S&P 500, but yet, markers managed to find them. 

The Nasdaq delivered a narrow day at resistance, but still no breakout. There was no change in the technical picture, but the index is very close to a new 'buy' signal in the MACD.

COMPQ Daily Chart

The S&P 500 experienced a similar narrow day to the Nasdaq and has a similar technical picture. Because the day finished with a small doji, which marks an indecisive day, the likelihood of a down day is increased.

SPX Daily Chart

The Russell 2000 (IWM) had a wider range day but finished with an inverse 'hammer.'  Technicals are not as bullish as the S&P 500 and Nasdaq, but there was no change in these despite the potential for a reversal.

Because today's action remained within the bounds of support and resistance defined by March-April's trading, it weakens the potential for today's candlestick to play as a reversal, but don't get caught by hindsight.

 
IWM Daily Chart

Going forward, we still have the opportunity of a breakout, and today's action has done everything but breakout. There is still plenty of time for this to happen, but the Russell 2000 will need to improve sharply should the S&P 500 and Nasdaq break out.

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