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Bears Turn The Screw

Courtesy of Declan

The Russell 2000 was again under pressure as it shed another 0.5%. The Russell 2000 now trades below its 50-day MA despite recovering some of today's intraday losses. It looks like controlled selling with an artificial prop to prevent a rout. The 200-day MA is the next port of call but a 1% loss of more will bring sellers in fast. Technicals are weak but not oversold.
 

The S&P looks to have confirmed a 'bull trap' with a return inside the prior rising channel. Such action typically results in a move back to rising channel support.  First port of call will be the 50-day MA.
 


The Nasdaq is holding up better than either Small and Large Caps with relative performance ahead of the curve although it has a MACD trigger 'sell' to work off.
 


The aggressive long in the Dow Jones isn't looking so great. It's still hanging on to support but after a day like yesterday it really should have closed higher. With the S&P already back inside its former rising channel I would be looking for the Dow Jones Index to do the same.
 


For tomorrow, look for an acceleration of selling in the Russell 2000, a drop inside the former channel for the Dow Jones and drip losses in the S&P. If premarket suggest bulls are going to be in control (e.g. a gap higher) then the Nasdaq may be the better index to trade. However, if the S&P can gain enough to bring itself to challenge the 'bull trap' then it will also be a good long trade (in essence, switching from a current 'bull trap' to a 'bear trap').
 


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