S&P 500, Nasdaq to Decide If Russell 2000 Can Break Inverse Hammer Spike
Declan Fallon | Dec 03, 2024 02:19AM ET
The Russell 2000 (IWM) has reached a point where it has successfully rebuffed the bearish inverse hammer with a series of narrow-range candles near its highs and is now ready to challenge the all-time high.
Technicals are net bullish; On-Balance-Volume is in an accumulation trend as the index outperforms the Nasdaq and S&P 500.
The Nasdaq registered a new breakout on the back of a new trigger 'buy' in the MACD. On-Balance-Volume is trending higher (as with peer indices) and it's also attempting a new run of relative outperformance against the S&P 500.
The S&P 500 posted a small gain although this will have hit the headlines as a new all-time high. Where the index is losing ground is in its relative performance against the Russell 2000 ($IWM) and Nasdaq. However, this should be viewed as net bullish as money rotates into more speculative equities.
Semis Look to Push Past Resistance
The Semiconductor Index finished at moving average resistance after looking ready to push through. I think it will be hard for the indices to sustain extended advance without participation from Semiconductors, but I'm happy for the market to prove me wrong here. On a positive note, there was a MACD trigger 'buy', but there is a whole pile of resistance still to overcome.
Get The News You Want
On a positive note, the Dow Transports Index is working a breakout in alignment with the Dow Industrials Average - so the tenets of Dow Theory are aligned in favor of bulls.
A measured move target for the Dow Transports is 22K, and as long as the index continues its upward ascent it will bring the Dow (and S&P 500) with it.
The next move I'll be watching for is for the Russell 2000 ($IWM) to eat into the spike high from the inverse hammer. For this to happen, the S&P 500 and Nasdaq will need to maintain their current form. If it can do this, then maybe even the Semiconductor Index won't get in the way.
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.