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Russell 2000 on Verge of New July Lows; S&P 500, Nasdaq Hold Breakout Support

Published 10/16/2023, 03:01 AM

It was a tricky Friday last week for the Russell 2000 (IWM) as the index experienced additional losses to take it on the verge of a new low for the decline initiated in July.

The MACD is still holding to its 'buy' trigger (a weak 'buy' as it occurred below the bullish zero line), and at least volume didn't register as distribution, although that's about all you could be positive about.

IWM-Daily Chart

The Nasdaq and S&P 500 both took heavier losses than they experienced on Thursday, but both are holding to breakout support.

Stochastics [39,1] have been rebuffed at the mid-line, effectively confirming a bear market high from last week. Further losses from here will set up a test of the September swing low.

COMPQ-Daily Chart

It was a similar story for the S&P 500 as stochastics were also rebuffed at the mid-line. A loss tomorrow would reverse the breakout and likely deliver new 'sell' triggers for the ADX and On-Balance-Volume, adding fresh pressure for a retest of October lows.

SPX-Daily Chart

In all likelihood, we are looking for losses across the indexes, delivering damning blows with new lows for the Russell 2000 to go with breakout reversals in the Nasdaq and S&P 500.

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