Russell 2000 Stays Pegged by Trend Resistance and 200-Day MA

There may be an aggressive long for the Russell 2000 by virtue of its under-the-radar action. Systems tracking trend breaks or moving average breaks will still be in the dark, but looking at the chart, there may be a subtle long setup. Risk-reward is easy to measure as an undercut of Friday’s low (on a closing basis) would negate the trade. Initial upside target is the 50-day MA. What I also like? The uptick in relative performance over the Nasdaq.

The equal-weighted S&P (SPXEW) and Dow Jones Industrial were pegged back Friday, but the September bounce remains in play with the 50-day MA key support for both indices. Important note: both indices are net bullish in technicals.

Things are looking at more sketchy fot the S&P 500. The index has given up 7,650 support and is caught in a bit of a no-man’s-land between 7,600 and 7,650. It will be important for 7.6K to hold, because below that you will be looking at the 200-day MA down near 7.3K. Technicals are more mixed, but the key stochastic metric I like to watch is holding the bullish midline; The index will become a short trade if this line is undercut.

The Nasdaq has reached a decision point. Friday comes at a divergence of support levels, a loss of which has the 200-day MA as the next target. Note, the ’bull trap’ on the reversal "evening star" should see a retracement all the way back to the low of the trading range, at 24.5K. But, as of Friday’s close, there may be a swing trade on an options straddle, as near-term things are set for a bounce.

Semiconductors have finally landed on their 200-day MA. There is a bounce trade here as this level also coincides with the July swing low. A loss of this moving average kicks off my measured move target into the depths of Fibonacci retracements.

Finally, Bitcoin suffered on the failure to hold the break of the 20-day and 50-day MAs. It’s now trading at the spike low, which marked the last solid ’buy’ signal on the bullish hammer at the 50-day MA. Note, if you are a long investor, this is still bullish as we are looking at a broader base recovery, but if you bought the August breakout and wanted to take profits, I don’t think you would find many arguing with you on doing that.

For this week, we have a 200-day MA bounce play in the Semiconductor Index, and a stealth long in the Russell 2000. An option straddle might be on offer in the Nasdaq.