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S&P 500, Nasdaq Form Bullish Hammer; Russell 2000 Battles 200 DMA Resistance

By Declan FallonStock MarketsDec 01, 2023 02:03AM ET
www.investing.com/analysis/sp-500-nasdaq-form-bullish-hammer-russell-2000-battles-200-dma-resistance-200644039
S&P 500, Nasdaq Form Bullish Hammer; Russell 2000 Battles 200 DMA Resistance
By Declan Fallon   |  Dec 01, 2023 02:03AM ET
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US500
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Bulls have managed to retain control of their powerful rally off October lows. Shorts looked ready to attack with the day before yesterday's bearish 'cloud cover' candlestick in the Nasdaq and S&P 500, but yesterday's action has managed to counter that without really changing the larger picture.

If you held index ETFs then the current action would be a decent opportunity to sell covered calls against your position. There may be some pullback, but it's hard to see any selling going all the way back to those October lows.

COMPQ-Daily Chart
COMPQ-Daily Chart

The S&P 500 managed a bullish hammer, although when it occurs in an overbought state it carries little bullish significance, but it does negate the previous day's more bearish candlestick.

The index is in a bit of a struggle in relative performance against the Russell 2000, and given current action I would be looking for an extension in the relative underperformance of this index against Small Caps.

SPX-Daily Chart
SPX-Daily Chart

The Russell 2000 (IWM) is in a dice with its 200-day MA. As the price squeeze was only good enough for a failed breakout, I would be looking for some easing in the price action before judging action at 20-day and/or 50-day MAs.

IWM-Daily Chart
IWM-Daily Chart

Markets are working through an overbought state that is to be expected after the extended short-term rally we have seen. The longer markets stay at current levels, the smaller any subsequent sell-off is likely to be.

S&P 500, Nasdaq Form Bullish Hammer; Russell 2000 Battles 200 DMA Resistance
 

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S&P 500, Nasdaq Form Bullish Hammer; Russell 2000 Battles 200 DMA Resistance

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Comments (4)
Taylor Huddlestun
Taylor Huddlestun Dec 01, 2023 7:26AM ET
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A bullish hammer??? A bullish hammer occurs at the BOTTOM of a downtrend. Not at the top. Yesterday formed what is called a hanging man. As soon as I read this guy saying it was a hammer I lost all respect of his abilities
Mahlatse Makololo
Mahlatse Makololo Dec 01, 2023 6:53AM ET
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so what should we expect at afternoon session
Saki Kalasaki
Saki Kalasaki Dec 01, 2023 5:08AM ET
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Said everything and nothing
Dec 01, 2023 1:52AM ET
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What is the symbol for all of those?
 
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