The Equal-Weighted S&P Is Left To Make The Running

The Equal-Weighted S&P (SPXEW) lost ground today, but it's the last main attraction for bulls. The trend from September's lows has defied two shorting opportunities previously marked at declining trend resistance and the 50-day MA. The 20-day MA may offer itself as support if selling was to contine beyond today, but this is at least a workable bounce zone. Technicals are net bullish, but the bounce off September lows has been running in a narrow range and looks prone to a widening, not necessarily a reversal.

The S&P may be a shorting opportunity. We have a potential bullish harami (a reversal candlestick)...but... it's down at the last vestiges of support (also good), with a tempting gap down to its 200-day MA. If you wanted to play the bullish card, set GTC buy orders below 7,500 to catch the inevitable stop washout. If you are a bear, try to get an entry as close to 7,600 with a stop just above and play for a move to the 200-day MA.

The Russell 2000 (IWM) is in a bit of a no-mans land. It's caught in a squeeze between 50-day and 200-day MAs. Today's candlestick is bearish (it would have been a very bullish harami cross had it been a swing low on oversold stochastics, but that is not the case here) and given the vicinity of the 200-day MA and the recency of the last test, I'm expecting a break lower.

The Nasdaq has already blinked with its move down towards the 200-day MA. It hasn't tested it yet, but a spike low would be enough to validate. Technicals are net bearish, which again favors a move lower, but there may a quick bounce trade for a buy order near 24,500, to play for a move back to 26K.

I still think Bitcoin (BTC.X) is going to test its 200-day MA before going higher, but if you think I'm wrong then the subtle defense of 76.7K might be reason to take a long trade here. A stop goes on a loss of 76K. The other trade to consider is to fish in all the stops that are likely lurking below 76K; nick a long trade and play for a bounce to the 20-day MA. Beyond that, I would be expecting higher, but given action since August it's unlikely to be pretty.

So we have Bitcoin as a possible long trade. The Nasdaq may be another long trade if we see a spike low below the 200-day MA. The S&P can be played either side. The Russell 2000 (IWM) is probably a better wait-and-see, as is the equal-weighted S&P.