Indices Seeking Support With Trading Ranges In Play

The equal-weighted S&P (SPY) (RSP) found buyers close to its 50-day MA, creating a higher high as momentum moves towards midline support of a bull cycle. Watch for a move down to test 8,725 - if this was to come on bullish spike (hammer or doji) it could be considered a good buying opportunity.

The Russell 2000 (IWM) is attempting a double bottom sub-$290. I would like to see Stochastics [39,1] below 20 to confirm. However, the 'bull trap' from August is the dominant influence, and such patterns typically result in a minimum test of prior support ($287), and often, something worse. As with the equal-weighted S&P, I would like to see a spike low to $285.

The S&P is bouncing around just above breakout support of 7,600. This might be the best 'buy-now' play with the 50-day MA just below to lend additional support. Technicals are mixed, edging bearish, with momentum only drifting out of an overbought state. As trend trader you want to see this overbought, so it's going to take a few days of buying to get this back there.

The Nasdaq (QQQ) has been quietly doing its own thing, holding support at converged 20-day and 50-day MAs while trading in the middle of a 25-27K range. As with the S&P it has only recently dropped out of an overbought state (somewhat unusual for a trading range), but still sides with bulls for those looking for buying opportunities.

I'm liking action in Bitcoin (BTC.X) (BTCUSD). The consolidation is trading in the upper part of the third of the three large white candles. The spike lows denote demand on drops below 77.5K, but I think a fake out move to the 20-day MA to shake weak hands would be preferable (although of course, may not happen). Of available trades, this is the most bullish, it's just hard to measure the risk:reward.

Sellers may be gathering the headlines, but markets remain in relatively good shape. I like the alignment reset of indices relative to their 200-day MAs, although there is still plenty of room to go before tests of these moving averages can be considered. The S&P has the lowest risk for longs, Bitcoin has the best upside potential.