📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

S&P 500 Dip Could Spark Buying Near This Key Level; Nasdaq Remains in a Bull Trend

Published 2024-05-30, 02:34 a/m

The S&P 500 has drifted back to breakout support, but it's no capitulation as the previous chart would suggest. Selling volume rose to register as distribution. Technicals are still net positive, although the index is underperforming relative to the Nasdaq. If there is any early morning selling then look to the 20-day MA as a buying opportunity.

SPX-Daily Chart

The Russell 2000 (IWM) gapped below its rising wedge, undercutting its 50-day MA in the process. Volume rose as distribution with 'sell' triggers in the MACD, On-Balance-Volume and ADX. The March 'bull trap' was the rally killer, what's happening now is action within a trading range and carries less weight.

IWM-Daily Chart

The Nasdaq dodged the selling experienced by the Russell 2000, and the S&P 500 to a lesser degree. Yesterday's loss was minor but remains well above support. On-Balance-Volume is whipsawing across a trigger line, but other technicals are good. Unlike other indexes, this is still in a bullish trend.

Nasdaq Composite-Daily Chart

I was going through my charts and came across one I don't normally look at, but I thought it was interesting. The S&P 500 ratio of equal weight, $RSP, to the S&P 500, $SPY, has reached a value below that of the 2009 bottom. I'm not sure of the significance of this yet as the S&P 500 ($SPY) hasn't reached any capitulation low, but if there is a long trade, then this is one such opportunity.RSP:SPY-Monthly Chart

For today, we will want to see the S&P 500 hold breakout support and perhaps benefit from the capitulation low in the $RSP:$SPY ratio. The Russell 2000 ($IWM) will drift in its trading range for the coming days and its unlikely to offer much guidance. Likewise, it will take a big loss in the Nasdaq to reverse its bullishness. Let's see what today brings.

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.