Analysis of Market Trends
On Friday, trading volumes were subdued, but investors saw a significant development as buyers stepped in at the trendline support for the Russell 2000. Despite the minor whipsaw signal in relative performance, the index maintained its momentum with the MACD holding on to the previous ‘sell’ signal.
Nasdaq and S&P 500 Performance
The Nasdaq managed to recover some losses from Friday’s session but still has a considerable distance to cover before challenging the ‘bull trap’ and remains below breakout support levels. The index continues to lag behind, especially the S&P 500. On-Balance-Volume has displayed a flat movement against the signal line, although it has shifted back to a ‘buy’ signal.
Continued Resistance for S&P 500
The S&P 500 also struggled to reclaim trendline support after failing to do so despite gains on Friday. While the index is currently outperforming relative to the S&P 500, both On-Balance-Volume and MACD indicators are sticking to their previous ‘sell’ signals, suggesting a challenging road ahead for the index.
Potential Opportunities Ahead
Today’s primary focus will be on the Russell 2000 ($IWM) as it sustains its upward movement from the crucial support level. However, should this trajectory falter post the initial trading period, attention should be redirected towards the Nasdaq ($COMPQ) and S&P 500 ($SPX) for potential short opportunities, especially if these indexes approach trendline resistance, which was once acting as support.
