The loss of the 20-day MA in the Russell 2000 (IWM) is playing towards a test of the 50-day MA. Friday's premarket had suggested a recovery was possible but the reality was something different. Volume climbed to register distribution, and technicals, aside from momentum (stochastics), are bearish.
Action in August and September at the 50-day MA didn't amount to much, but it has played as support since. We do have the Santa rally coming, so a pre-emptive strike at the 50-day MA would make sense.
The S&P 500 suffered minor losses, although trading volume registered as distribution. Technicals are mostly positive, although MACD is on trigger 'sell' and the index is underperforming the Nasdaq. Monday offers a new opportunity to build on the early December breakout.
The Nasdaq finished on an indecisive 'spinning top' which leaves it open to a move in either direction pending what happens elsewhere. In all likelihood, the Russell 2000 is set for another down day Monday, but should the S&P give up breakout support too then it's hard to see the Nasdaq holding on, despite its relative outperformance.
Technicals are net positive. While selling in the Nasdaq is unlikely to challenge major support, the 18,000 level could be an intraday play.
What will help the Nasdaq is the marked gain the Semiconductor Index. The index gapped higher and above all key moving averages. Former wedge support turned resistance is still in play as is a sequence of lower highs.
However, a good next week would move the index out of a downtrend and into a basing pattern. This would be good news for the technology sector in 2025.
For next week, watch action in the Russell 2000 ($IWM) and Semiconductor Index. Both are at an inflection point with the Semiconductor Index likely to blink first. A positive premarket would help all markets, but the S&P might be the chief winner given its recent consolidation.