S&P 500 Steady but Nasdaq Breadth Weakness a Worry; Russell 2000 Tests Key Support
Declan Fallon | Feb 07, 2024 03:04AM ET
A bit of a non-event for the S&P 500 and Nasdaq as both indexes closed with tight doji near their highs. There isn't a whole lot more to add for these indexes.
The Russell 2000 (IWM managed to deliver a little more upside with a successful test of its 50-day MA. However, the volume was well down on what I would like to see for a successful support test.
I follow J.C. Parets and he has noted the breadth weakness in this rally.
This is apparent in the Percentage of (Nasdaq) Stocks above the 50-day MA, 200-day MA, Bullish Percents Index, and Summation Index, all of which are showing a bearish divergence.
Given the breadth picture (in the Nasdaq), the expectation is that tight trading will eventually give way to selling, or catch bulls off guard with a 'bull trap'. I would expect this selling to spill across indexes, but let's see what the market brings.
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