Russell 2000 Defends Support; S&P 500, NASDAQ Vulnerable To More Losses
Declan Fallon | May 27, 2019 12:14AM ET
Friday was a bit of a mixed bag. The Russell 2000 was able to defend horizontal support as it continues to build a sideways pattern. While it trades sideways it will keep other indices in check until there is a confirmed directional turn—either a break of current support (for bears) or a rally back to, then beyond 1,615 resistance.
With the Russell 2000 caught inside a trading range, the breakdowns in the S&P and NASDAQ are caught in a bit of a no-man's land. As the Russell 2000 failed to break its support, both the S&P and NASDAQ are vulnerable; not just to additional losses, but also to a 'bear trap' and a rally through their respective consolidation triangles.
While the Russell 2000 is defending support, Semiconductors are heading in the other direction with an undercut of the 200-day MA. Further losses in this index will drag the NASDAQ and NASDAQ 100 with them.
Finally, the relationship between Transports and the Dow Jones Index continued to struggle as it returned deep inside the prior 'bear trap'. This bearish relationship could pick up speed if 0.395 is lost. This indicator suggests a far more bearish outlook than any other index.
Get The News You Want
For Tuesday, watch the Russell 2000 if bullish and the Semiconductor Index if bearish. My hunch suggests bears are going to edge it but let price action be your lead.
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.