U.S. stock futures slip lower; Cook’s firing increases Fed independence worries
When markets looked ready to drift lower, buyers dug their heels in and defended 20-day MAs. The biggest beneficiary was the Russell 2000 (IWM). Once again, it returned to a breakout, although the index triggered a new On-Balance-Volume ’sell’ on Monday’s light trading. On the flip side, relative performance to peer indices has accelerated in its favor, kicking off a new phase of outperformance that should last beyond Friday’s surge.
Tech stocks have been the real winner in 2025, but now maybe the time to rotate this money out of tech into other indices and more diversified stocks. For example, NASDAQ relative performance moved sharply against it relative to the Russell 2000 as it attempts to challenge the early August ’bull trap’. A test of the 200-day MA would be welcome.
The other winner from Friday was the Dow Industrial Average ($INDU). It posted a new breakout with a small loss on Monday.
Shorts are not without opportunity. Bitcoin ($BTCUSD) has come off sharply from its ’bull trap’. The asset has undercut its 20-day and 50-day MAs, and Monday’s higher volume distribution brings it ever closer to its 200-day MA, following a new swing low for the cryptocurrency.
For today, it remains a buyer’s market for lead indices with Monday’s low volume selling offering long trade opportunities for those willing to buy the risk; I would look for Friday’s lows to hold. Shorts will have the more volatile Bitcoin ($BTCUSD) to trade; sell into any move back to 20-day/50-day MAs.