Russell 2000, S&P 500, Nasdaq Pullback: Temporary Pause or Trend Reversal?
Declan Fallon | Jul 17, 2023 17:30
It was inevitable sellers would come in to pick at the breakout, and they did so with aplomb, but not before they left behind some bullish signs. Last Friday was not an options expiration day, so volume ranked as distribution, but no support level was challenged by the close of business.
The biggest selling was found in the Russell 2000 (IWM), but such action didn't reverse any of the bullish technical signals in the index.
The Nasdaq and S&P 500 experienced less selling than the Russell 2000, but the selling did rank as distribution. Friday's action could be considered a doji, and the indecision associated with this candlestick could mark a reversal. Still, neither the Nasdaq nor S&P is at resistance - so I would view this as a pause in the rally. The S&P saw a new 'buy' trigger in the MACD, keeping lead technicals as net positive.
The Nasdaq also delivered on a MACD 'buy' as it runs inside its rising channel. The technicals are in excellent shape.
At face value, Friday's action may have come across as a little disappointing, but such losses help consolidate the gains, and what transpired was one of those days.
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.