Friday's losses were modest, and traded volume below that of prior day's buying. This has established a baseline risk (a loss of last week's swing low) for any future upside reward. We won't want to see an extension of Friday's selling as this would put immediate pressure on those lows, particularly if buyers can't stage a comeback in early afternoon trading should losses kick off early.
The Nasdaq is nicely positioned. It's range bound, so can flux either way, but traders do seem prepared to defend its 50-day MA, and given its below its 52-week high it will not have attracted the attention of momentum traders/algos yet. Wednesday's and Thursday's trading ranked as accumulation. The +DI edged above -DI (bull trend), but with the ADX below 20 it's only a weak trend - typical of a trading range.
The S&P has successfully defended 7,600 support for a second time (although if it makes a third pass at this level I would not be so optimistic). Friday's selling was light and it too enjoyed a bullish cross in +DI/-DI. I would like to see a new MACD 'buy' signal, which would be a strong buy signal given its position above the zero midline.
The Russell 2000 ($IWM) has a bit more overhead to overcome. We had the breakdown from the tight range that undercut both its 20-day and 50-day MAs. Its now looking 'up' to these moving averages. Thursday's small black (doji) candlestick at resistance is generally not good news, but Friday went a long way to negating its inherent bearishness. The index is range bound amd my outlook is more neutral, whichis reflectd in its mixed technicals (neither overbought or oversold).
The equal-weighted S&P is toying with its 50-day MA and breakout support, but the bounce has come a little early based on the stochastics - I like to see a bounce from the 50-midline (circled), but maybe the next swing down will give the trade-worthy bottom.
Bitcoin is at a point of interest. After its big surge the cryptocurrency has stalled at its 50-week MA. I don't think it will stay there for long, but its interesting to see sellers. This will shape a right-hand-base into 2027/28, and I remain long term bullish.
If you are looking for a trade, keep an eye out on the Dow Industrial Average. It has bounced off the stochastic midline after an early defense of the 50-day MA (that also followed from a two-bar reversal). This is low key, bullish action. Watch for a 'stop harvest' on drop below 53K, might be a good place for a GTC buy order to take advantage.
For the coming week, keep a bullish eye on markets. If we get a big red candlestick Monday or Tuesday, then we may need to reassess the bullish thesis, but things look good for now.
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