Yesterday presented a mixed picture for investors – while all major indices recorded gains, the S&P 500 and Nasdaq closed with a ‘black’ candlestick, indicating potential vulnerability to further losses.

Russell 2000’s Struggles

The Russell 2000 ($IWM) experienced modest losses with light selling volume, indicating a less severe downturn. Despite this, technical indicators remained positive, pointing to a possible ‘bull trap’ scenario.

IWM-Daily Chart

Bullish Outlook for S&P 500 and Nasdaq

Both the S&P 500 and Nasdaq showed signs of potential ‘bull traps’ but managed to secure gains, challenging the bearish patterns. Nasdaq’s performance even triggered a ‘buy’ signal for On-Balance-Volume, indicating strong momentum.

To fully negate the bearish sentiment, these indices need to close above the ‘bull trap’ highs, signaling a shift towards a more optimistic trajectory.

COMPQ-Daily Chart

Current Status of S&P 500

While the S&P 500 is holding a ‘sell’ trigger in its MACD, overall technical indicators remain bullish. However, it lags behind the Russell 2000 in performance, indicating a need for stronger momentum.

SPX-Daily Chart

Looking ahead, the Russell 2000’s bearish trend is likely to be counteracted by the more positive outlook for the Nasdaq and S&P 500. While none of the indices are indicating significant market peaks, they are poised for continued growth, with a sustained trajectory of around 45 degrees.