Courtesy of Declan.
Small Caps again took the brunt of the selling as Shorts took advantage of yesterday’s small rally back to former support (turned resistance) to enter positions. With the ‘bull trap’ in full effect, the next target down for the index is 1,308. Of supporting technicals, only Stochastics [39,1] is left to break its bullish alignment,
The S&P took a modest loss, but not enough to break it out of its consolidation. Volume was also lighter. With the Russell 2000 on the way down, it’s suggesting the S&P will follow suit. Technicals are holding up well.
The Nasdaq had small losses, but volume did climb to register as distribution. However, the breakout is holding, and it has room to run to support.
For tomorrow, look for an acceleration lower in the Russell 2000. The S&P may attract late-player Shorts looking to see if this index follows the lead in the Russell 2000.
You’ve now read my opinion, next read Douglas’ blog.
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