No great surprise here that the patient saw another piece of the puzzle unfold with the Russell 2000 down the most percentagewise. After all, I have written about the unusual volume on new highs every day since it occurred exactly a week ago.
Moreover, we have noted that the high tick from last Tuesday’s spectacular run remains the high. Last 5 trading days, IWM stayed within the range of 03/04 until this Tuesday, when it broke the lows and closed on a pivotal point-118.
Therefore, safe to say that under 118 expect more correction. I wouldn’t rule out 114 area next stop.
One positive sign is the S&P 500. With the small caps decline, it remained above the fast moving average and Monday’s low. Same with DIA. NASDAQ held Monday’s low but closed beneath the fast moving average.
Here is a repeat of the 4 possible scenarios one more time, only now with some slight modifications:
1) The blow off top pattern is still playing out
2) The market is digesting the recent rally through time rather than price
3) The market is digesting while it works off overbought conditions, and pretty much will continue to be range bound for a while longer
4) The market is not merely digesting, but fueling for a blast off from last Tuesday’s high with much higher levels to come-looking a bit less likely now
S&P 500 (SPY) Although under the average daily volume, still a distribution day in that better volume than Monday’s session on a red day. Subscribers: Negative pivots in all
Russell 2000 (IWM) Held 118. Eyes here
Dow (DIA) Tuesday’s low not the point to defend if bulls have a chance here
Nasdaq (QQQ) Looking toppy now too
XLF (Financials) 22.00 could easily be the place this stops declining
SMH (Semiconductors) I will love this group for a long time but not enough to stay long if everything else disintegrates
IYT (Transportation) Inside day but the shooting stars are beginning to show more of a top than launch pad
IBB (Biotechnology) Vulnerable to the 50 DMA
XRT (Retail) Vote for best place to go if the market holds up-still see new highs possible
IYR (Real Estate) Closed green-another place to look over Tuesday’s highs
GLD All of a sudden, looking exciting-watch this over130.60
USO (US Oil Fund) Touched down on the 200 DMA-important area
XOP (Oil and Gas Exploration) Drop to the 50 DMA
TBT (Ultrashort Lehman 20+ Year Treasuries) TLT Confirmed a phase change to bullish Monday and now we see why
EEM (Emerging Markets) Subscribers: One of the first to short this group and right now, looks heavier
CORN (Corn) Subscribers: Inside day which means over 33.66 seems more likely we will see this cross the 200 DMA
BAL (Cotton) Subscribers: 2 Inside days-good place for eyes
JO (Coffee) Subscribers: Made new highs and worked off some overbought conditions-watching the 10 DMA to hold
SGG (Sugar) Subscribers: Next time this clears the 65 week moving average-60.45 looks poised for the next place-the 23 monthly a=MA -65.12
Bye for Now!
