🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

S&P 500, Nasdaq Fall Below 50-Day MA; Russell 2000 Net Bearish: What Lies Ahead?

Published 18/09/2023, 06:57
US500
-
US2000
-
IWM
-
IXIC
-

All headlines this week will focus on the Fed's decision, but markets had their own big end-of-week finish last week with triple witching options expiration combined with a sell-off to leave the S&P 500 and the Nasdaq in a little trouble.

Having managed to edge past the 50-day MA on Thursday, the S&P 500 quickly found itself on the wrong side of the line by Friday's close. While triple witch volume clouded the volume, Friday's selling likely counts as distribution.

SPX Daily Chart

It was more of the same for the Nasdaq as it cut below its 50-day MA on higher volume. There was a MACD trigger 'sell' to go with an On-Balance-Volume 'sell'. Slow stochastics are okay, holding the bullish mid-line, but there is very little room for further weakness in this indicator. There is also an emerging underperformance relative to the S&P 500 that needs to be monitored.

Nasdaq Composite Daily Chart

The Russell 2000, via (IWM), is lingering around its 200-day MA, experiencing its own confirmed distribution but without the support break to give it's weighting. Unlike the aforementioned indices, technicals are net bearish; a bad omen for a support break.IWM Daily Chart

As we head into next week, we want to see how markets react (vis-a-vis support) to the Fed decision, rather than the Fed decision itself. If no support breaks, and I'm looking at the Russell 2000 (IWM) here, it becomes a bit of a non-event.

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.