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S&P 500, Nasdaq Set to Consolidate This Week; Russell 2000 Dips Below Key Support

Published 04/15/2024, 02:40 AM

I'll cover daily charts during the week, but in this article, I wanted to look at the weekly picture. Friday was an ugly day on daily timeframes, but weekly charts are holding up well.

The Nasdaq is in the early stage of a rolling top, but I would be looking to the 20-week MA to attract buyers, although in August 2023 this moving average only offered brief support before it was breached.

COMPQ-Weekly Chart

The S&P 500 lost more ground than the Nasdaq and has certainly begun a period of consolidation.

As with the Nasdaq, the 20-week MA will be the intitial test, but we may have to wait until the 50-week MA before sufficient buyers are around the next leg of the rally.

SPX-Weekly Chart

Things are a little more challenging for the Russell 2000 (IWM). It reversed breakout support to dip below key support of $205, dropping back to 20-week MA support.

For now, we have a warning sign, and if we see a drop below $195 then things will get a lot more sticky. Technicals are net bullish, although relative performance against the S&P 500 has been doggedly negative.

IWM-Weekly Chart

Today could be a struggle for the indexes, particularly at the open. Watch for a late-day rally to leave bullish "hammer" or "dragonfly doji" candles. This should give indexes some respite for the rest of the week, and maybe open a 1-2 day long trade.

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