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Bull Flag Breakouts in Nasdaq, Russell 2000 and S&P 500 Hit a Road Block

Published 17/02/2023, 04:21 pm
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Yesterday's gains offered classic 'bull flag' breakouts, but today put a damper on many of those market moves.

Russell 2000

The Russell 2000 opened near the low of Wednesday. Despite an intraday surge to yesterday's highs, it closed just below its open price - registering a distribution day in the process.

Technicals haven't changed, although relative performance is improving against the Nasdaq.

Russell 2000 Daily Chart

Nasdaq

The Nasdaq closed near yesterday's lows, undoing that nice, big breakout candle. There is still the MACD trigger 'sell,' but other technicals are okay, and there was no confirmed distribution for today's selling.

Nasdaq Daily Chart

S&P 500

The S&P 500 had the weakest finish. It just edged a 'bull flag' breakout yesterday and took a larger loss today. Adding to the malaise was a relative performance loss against the Russell 2000. Selling volume climbed to register as distribution too. Yuck...

S&P 500 Daily Chart

The net sum of today's action was to reverse the 'bull flag' breakouts but not undercut the more important resistance breakout.

Having said that, I would view today's end-of-day close as a set-up for future losses. While I would tolerate any intraday violation of nearby breakout support, I wouldn't want to see an end-of-day finish below these levels for any index.

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