It didn't happen today, but the Russell 2000 didn't waste any time losing 1,500 support. With technicals oversold there is a chance this could evolve into a larger crash but other indices aren't showing the level of weakness which could offer this scenario. Not surprisingly, relative weakness ticked lower despite its recent relative strength.
Helping to prevent a crash in the Russell 2000 is the S&P at the 200-day MA. The index has been strongly outperforming the Russell 2000 in recent weeks and while at the 200-day MA still has the strong foundations for a bounce.
The Nasdaq is also at its 200-day MA (positive) and like the S&P is primed for a bounce. It needs buyers - and volume - but buyers have a relatively low-risk play to work with.
To complicate matters a little, the Semiconductor Index has undercut its 200-day MA. The bounce of the last few days has set up a possible shorting opportunity at the aforementioned moving average.
With all indices oversold there is the potential for a larger crash, but with the presence of the 200-day MA for the Nasdaq and S&P, the easier option may be for a bounce.
Comments
Log in or sign up to join the conversation.