Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Nasdaq Struggles as Russell 2000 and S&P 500 Turn Bearish

Published 15/03/2023, 05:02
Updated 09/07/2023, 11:31

Given the severity of the SVB-inspired sell-off in the indices, I am highly skeptical about the validity of the recovery bounce over the last two days. Buying volume is down and has so far failed to challenge the distribution which has come before. We have had confirmed breaks of support, and those support breaks remain valid as of today.

The Nasdaq lost 11,500 breakout support but has at least managed to recover its 200-day MA. Again, I would rather see breakout support regained (now resistance), but there is a chance another day's buying will deliver on this. There is a fresh 'buy' trigger in On-Balance-Volume. The index isn't really at a trade position, a short looks more favored, but it would be a noisy trade.

Nasdaq Composite Daily Chart

The S&P 500 stopped short of its 200-day MA. Technicals are net bearish, except for the strong relative outperformance against the Russell 2000. The index is well inside its prior range, so this will likely be a noisy action for the next few days (and weeks). I would edge bullish, and there is investment potential at current levels, but it's a difficult trade. 

S&P 500 Daily Chart

The Russell 2000 has suffered the most over the last few days, quickly going from a breakout to a move back to channel support. Technicals are net negative, and it will be long before they turn positive again.

Russell 2000 Daily Chart

The effect of the SVB banking crisis is to drop indices back inside prior trading ranges. It's not a crisis from a technical perspective, but if we knock out last year's lows, it will be.

 
 

Latest comments

Risk Disclosure: 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.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.