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S&P 500, Russell 2000, Nasdaq Break Out: Can Indexes Avoid a 'Bull-Trap' Today?

Published 2024-03-04, 02:15 a/m
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Last week finished on a high with breakouts in the Russell 2000 IWM, S&P 500 and Nasdaq.

The Russell 2000 went a step further with a breakout on the weekly time frame too. The break on the weekly time frame for the Russell 2000 is critical as it marks the start of a right-hand-side base after repeated attempts to clear $195 ($IWM) had failed.

If there is a concern (across the board) it's that breakout volume was modest.

IWM-Weekly Chart

IWM-Daily Chart

The Nasdaq kept up with its step-by-step rally, delivering a breakout with new 'buy' triggers in the MACD and On-Balance-Volume, although the former indicator had flatlined so it's not the most effusive 'buy' trigger.COMPQ-Daily Chart

The S&P 500 gained just under 1%, a little less than the Nasdaq, but the breakout was just as valid.

The index has a much stronger accumulation trend than the Nasdaq, and with all indexes in alignment on breakouts with small-cap leadership, all indexes should continue to perform well.

SPX-Daily Chart

Heading into this week, we may see some early weakness, and if we do, it will be important we don't see a close below Friday's open.

If this was to happen, we would be at risk of a 'bull trap'. Intraday losses, even losses that undercut the breakout are okay, it's how markets finish that's important.

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