Weekly Charts Of The S&P And Nasdaq Are Only Starting To Break Down

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I'll cover the daily charts during the week, but I wanted to take a closer look at the weekly picture. Friday was an ugly day on the daily timeframes, but the weekly charts have been holding up well. The Nasdaq appears to be in the early stage of a rolling top, but I would be looking to the 20-week MA to attract buyers -- although, in August 2023, this moving average only offered brief support before it was breached.

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The S&P 500 lost more ground than the Nasdaq, and it has certainly begun a period of consolidation. As with the Nasdaq, the 20-week MA will be the initial test, but we may have to wait until the 50-week MA before sufficient buyers are around the next leg of the rally.

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Things look to be a little more challenging for the Russell 2000. It reversed breakout support to dip below the key support of the $205 level, dropping back to 20-week MA support. For now, we have a warning sign. If we see a drop below the $195 mark, then things will get a lot more sticky. Technicals are net bullish, although relative performance against the S&P 500 has been doggedly negative.

Monday could see a struggle for the indices, particularly at the open. Watch for a late-day rally to leave bullish "hammer" or "dragonfly doji" candles. This should give the indices some respite for the rest of the week, and maybe open a one to two-day long trade.

More By This Author:

Nasdaq Accelerates Higher With Sharp Jump In Relative Performance
Russell 2000 Squeeze Continues Heading Into Big Economic News Day
Russell 2000 "Ascending Triangle" Squeeze, With The Nasdaq And S&P Struggling

Disclaimer: Investors should not act on any information in this article without obtaining specific advice from their financial advisors and should not rely on information herein as the primary ...

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