Friday saw indices take another hit lower, but most of the damage was done at open (with gaps lower) and by end of day, S&P 500 and Nasdaq finished with small doji, rather than any more catastrophic candlesticks.
Nasdaq is still close enough to key breakout support that a rally on Monday could see this support regained and a 'bear trap' established. It will have to be the next one or two trading sessions for this to be confirmed. Any further loss now would instead open up a test of 50-day MA, and potentially, a move back to 10,600s. Futures are looking good for a bounce, so let's see what the day brings.
S&P 500 had long since given up breakout support and is well inside its prior trading range. The index does not find itself back at its 200-day MA, a source of resistance in December and early January, but now has a chance to play as support. Better still, selling volume hasn't registered as distribution and intermediate stochastics [39,1] sit at mid-line, a typical starting point for bounces in bullish markets. I like the trade potential here.
iShares Russell 2000 ETF (NYSE:IWM) is caught a little in two minds. It has the strongest technical picture and continues to outperform Nasdaq and S&P 500, but Friday's close just below breakout support does give bulls a little work to do for it to regain confidence. It has a 50-day MA to lean on at $184 and it might do so today.
Permabears will likely be looking at Dow Jones Industrial Average. After a trailblazing move in latter part of 2022 to potentially drive new all-time highs, it has since stumbled backward. We have a big fight coming around 32,500 which is also near its 200-day MA. Lose this support, and the index will be staring at a move down to 30,000.
So, for today's session, track index action near 200-day MAs (50-day MA in Russell 2000). I still think we have reached a base low, and that higher prices are ahead, but this "base low" could last another few weeks with further sideways action.