Last week, Friday's selling in the Russell 2000 (IWM added to Thurday's down day, and volume rose in confirmed distribution. This built on the Wednesday doji and its reversal potential at the end of a rally. Despite this, technicals remain net positive. This is of little real concern until we see a test of breakout support around $189 and the 20-day MA (which is close to $189).
The Nasdaq is also easing back to breakout support along with the fast-rising 20-day MA. Unlike the Russell 2000, there is creeping bearishness in the technicals with a MACD trigger 'sell.' In addition, the Nasdaq has moved to a period of underperformance relative to the S&P 500. There is still plenty of room before support is tested, but it's likely to do so before the other indices.
The S&P 500 held up the best on Friday, but the 'black' candlestick is not ideal. However, because the volume was up, it will record itself as accumulation. The S&P 500 is outperforming the Nasdaq but underperforming against the Russell 2000. Given that, I think the attention will shift to the other indexes, and the S&P 500 will tick along.
If there is an index holding the others back, then the Russell 2000 (IWM) is the one. The long-standing base on the weekly chart, dating back to early 2022, is ready to clear $198 and kick-start the formation of a right-hand-side base. When this happens, it will provide a slingshot for the other indexes to continue their rallies.
