50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Russell 2000, Nasdaq Look to Escape Bull-Trap; S&P 500 Eyes Positive Open

Published 18/03/2024, 07:18
US500
-
US2000
-
IWM
-
IXIC
-

Options expiration will have clouded Friday's volume, but Friday's buying in the Russell 2000 (IWM) did not do enough to challenge the "bull trap" or the loss of the 20-day MA.

The index deals with 'sell' triggers in the MACD, On-Balance-Volume, and relative performance against the Nasdaq.

The expected result of the 'bull trap' is a move back to - then below - support defining the trading range off which the original breakout emerged. For the Russell 2000 ($IWM), this means a move back to $188s.

IWM-Daily Chart

The Nasdaq has just drifted below breakout support and its 20-day MA, enough to count as a "bull trap". If there isn't a return above 16,055 today it will effectively confirm the "bull trap", but there is still time for the index to get out of this.COMPQ-Daily Chart

The S&P 500 was the index not to flag a 'bull trap' and could potentially lead a recovery off its 20-day MA. If there is a long play today it will be in this index.SPX-Daily Chart

For today, we will want to see a positive open, especially in the S&P 500. Given the vulnerabilities of the Nasdaq and Russell 2000, a gap higher on the open would likely lead to more selling, so a slow-and-steady approach is perhaps preferred.

As the Russell 2000 ($IWM) is furthest away from prior breakout resistance, it's most likely to see a short-attack on a return to this level.

Latest comments

Loading next article…
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.