The indices’ relief bounce has finally hit the first potential reversal point with “black” candles in and , and a bearish harami cross for ().
Trading volume in the Russell 2000 was lighter than in previous days, a positive sign for those looking to get more out of this rebound.
Momentum indicators have come out of oversold status, although I like to see a midline crossover before considering the situation under bull control.
The S&P 500 ended the day with a more bearish “black” candle, a common reversal candle on a bounce, but even more so on a new high.
The technical data is weak and sharply bearish, which increases the possibility of a bearish reversal. Watch out for a gap down at the opening.
For the Nasdaq it was a similar story to that of the S&P 500: a bearish “black” candle on sharply bearish technical data.
If the indices start to move lower, one will have to pay attention to the measured movement targets, which for the Nasdaq and S&P 500 are close to their respective 200-day MAs. The Russell 2000 ($IWM) target is near December breakout support.
