Tuesday, November 27, 2007

Market Review: Small caps ahoy!

Bears stamped on the post-holiday feel-good rally taking the indices not only to last Wednesday's lows, but in some cases beyond it (I am looking at the Dow and S&P here). The index to watch for today is the Russell 2000. It finished as close to support as it could without breaking it. Another down day like Monday's and only a 'bear trap' would save it - i.e. Wednesday (tomorrow) would have to be a massive rally.

A confirmed double top in the Russell 2000 would likely signal the same for Large caps - and eventually Tech indices too

The semiconductors tell their own sad story; in July they were challenging 550, now they are struggling to hold 400 - a 27% fall is bad is anyone's books, but I am surprised this hasn't influenced the Nasdaq, or Nasdaq 100 more. A developing bullish divergence in the supporting CCI gives the best hope for value buyers:

Tuesday will be interesting.