Indices Close Lower With Swing Lows Under Pressure
Declan Fallon | Sep 14, 2020 12:16AM ET
The NASDAQ closed below its 50-day MA on Friday, as the early week swing low finds itself vulnerable to an undercut and loss of support. Expectation would be for a measured move down, which, given the 1,000+ point move from the 12,074 high to the swing low, would set a current target around 10,250. Technicals are net bearish with the index underperforming relative to the Russell 2000.
The S&P failed to recover the rising trend, so no 'bear trap' but there is still an opportunity for bulls to defend its 50-day MA. It has the benefit of a relative outperformance against the Russell 2000 to fuel a recovery.
The Russell 2000 (via iShares Russell 2000 ETF (NYSE:IWM)) had already lost consolidation support of $152.50, then the bounce failed to recover this loss. Technicals are net negative with the 200-day MA the last stand for the index. What happens here will have repercussions for other indices.
For the coming week, bears will try to press their advantage and send markets below their recent swing lows in what could morph into measured moves down. The 200-day MA test will be key for the Russell 2000 as it will set the the tone for what may happen in the S&P and NASDAQ in the coming days.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.