Technical Market Overview

• RTY (Russell 2000): The Russell 2000 is showing signs of recovery after a significant correction, currently trading at 1967.99. Price has rebounded 8% from the April 8th low of 1756.36, forming a series of higher lows and higher highs. The index remains below all major long-term moving averages (50-day at 2048.66, 100-day at 2177.64, and 200-day at 2197.80), indicating the broader downtrend is still intact. However, the short-term momentum is positive with price above the 9-day SMA (1928.95) and 21-day SMA (1899.74). The MACD histogram is positive and expanding (23.18), suggesting increasing bullish momentum. RSI at 51.52 shows neutral conditions but with room to move higher. Volume patterns show accumulation on up days, particularly on April 23-24, supporting the recent rally. Key resistance lies at 2000, while support has formed around 1920.

• DJI (Dow Jones Industrial Average): The Dow is showing resilience at 40672.60, having recovered 11.5% from its April 8th low of 37576.00. The index has formed a bullish ascending triangle pattern over the past week with higher lows and resistance around 40800. Price remains below the 50-day SMA (41813.67), 100-day SMA (42792.21), and 200-day SMA (42245.35), confirming the intermediate-term downtrend. However, the MACD histogram has turned positive (260.59), indicating improving momentum. The ADX at 35.41 shows a strong trend, though the negative directional indicator (24.96) still exceeds the positive (15.50), suggesting downward pressure remains. Stochastic oscillator at 88.14 is approaching overbought territory. Volume has been declining during the recent rally, raising some caution. Immediate resistance at 40800 with support at 39750.

• SPX (S&P 500): The S&P 500 is showing recovery momentum at 5565.20, having bounced 11.7% from its April 8th low. The index has broken above its 21-day SMA (5368.00) but remains below the 50-day SMA (5639.71), 100-day SMA (5824.35), and 200-day SMA (5758.69), indicating the intermediate-term downtrend is still intact. The MACD histogram is positive and expanding (50.75), showing increasing bullish momentum. RSI at 54.03 is neutral with room to move higher. The Bollinger Band %B at 0.80 suggests price is approaching the upper band, potentially indicating short-term resistance ahead. Volume has been declining during the recent rally, which is concerning for sustainability. The index faces key resistance at 5600-5650, with support at 5400-5450. The stochastic oscillator at 96.43 indicates overbought conditions, suggesting a potential pullback or consolidation.

• Broader Market Themes: All three major indexes are showing similar recovery patterns following the early April selloff, with the Russell 2000 lagging slightly in percentage terms. This suggests improving risk appetite but with small caps still underperforming, indicating selective rather than broad-based buying. The indexes are all trading below their 50-day, 100-day, and 200-day moving averages, confirming the intermediate-term downtrend remains intact despite the recent rally. Volume patterns across all indexes show declining participation during the recovery, raising questions about the sustainability of the move. The ADX readings across all indexes indicate strong trends with bearish bias, though momentum indicators like MACD are showing improvement. From an Elliott Wave perspective, this appears to be a corrective wave 4 bounce following the wave 3 decline in early April, suggesting another leg down (wave 5) may be forthcoming. Key levels to watch include the 38.2% and 50% Fibonacci retracements of the March-April decline, which align with resistance zones on all three indexes. Market breadth has improved but remains below levels seen during the previous rally, indicating selective participation in the current recovery.