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Russell 2000 Forms Potential Double Top; S&P 500, Nasdaq Approach Breakout Support

Published 02/21/2024, 02:05 AM

After the long weekend markets continued to sell off, bringing the S&P 500 and Nasdaq back to breakout support while the Russell 2000 (IWM) shaped a potential double top.

The Russell 2000 ($IWM) has an On-Balance-Volume 'sell' trigger while other technicals are net bullish. However, the reversal from the $205 level marks a potential double top, one that would be confirmed on a loss of $190.IWM-Daily Chart

Both the Nasdaq and S&P 500 eased back to breakout support, doing so on higher volume selling distribution.

The Nasdaq is underperforming both the Russell 2000 ($IWM) and S&P 500 ($SPX) and is the index to likely retreat first back to its 50-day MA. As it stands, it's defending 15,550 breakout support.

COMPQ-Daily Chart

Likewise, we have the S&P 500 nestled against a micro-support level of 4,950 with good technical strength, barring the earlier MACD trigger 'sell'. As with the Nasdaq, yesterday's trading volume registered as confirmed distribution.SPX-Daily Chart

For today, bulls will need to show some resolve if this selling is not to become something more. I would still like the indexes to move back to 50-day MAs, but today will be a chance for the first level of support to come into play and attract buyers.

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