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

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 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.

The 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.

Things are a little more challenging for the (). 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.

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.