Russell 2000 Undercuts Support; S&P 500, Nasdaq Hold Steady: What's Next?
Declan Fallon | Sep 06, 2023 08:18
The warning signs were there for the Russell 2000 (IWM), and today's action delivered on that foreshadowing. Sellers pushed the Small Caps index below 20-day and 50-day MAs along with the June swing high.
Volume rose to register a distribution day, along with a bearish reversal in the ADX and a relative performance loss against S&P 500. The next target for support is the 200-day MA, but it's going to take a few days of selling before it gets there.
The Nasdaq experienced a small loss as technicals remained net positive. Volume remained light, adding to the general antipathy towards this index today. Whether it can hold out should the Russell 2000 continue to deteriorate remains to be seen.
The S&P 500 also saw light losses as it, too, held support defined by the June swing high. The significant disparity in the action between the S&P 500 and Russell 2000 meant there was a sizable relative performance gain for the large-cap index.
For tomorrow, the Russell 2000 will likely continue to be the center of attention. If there is no real recovery in the index, we will want to ensure there are no follow-up losses in the S&P 500 and Nasdaq that could lead to a break of support in these indexes.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.