Early Profit Taking

It was a slow start for some indices, but not surprisingly, the Russell 2000 saw the biggest of profit taking. The index lost just over 1% in a 'bearish evening star' candestick confirmation.   However, supporting technicals are little changed.

On the other hand, the S&P barely budged. It closed on a 'neutral' doji on higher volume distribution. Technicals remain bullish and don't show topping factors yet.

The Nasdaq finished with a closing gap lower, but unlike the S&P, volume didn't register as distribution. Aside from relative underperformance, technicals are positive.

The Dow was the only exception, it was able to post small gains.

If today is the start of profit taking then tomorrow should see more of the same. Meanwhile, pullback buyers will likely wait a few more days before committing.

You've now read my opinion, next read Douglas' blog.

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Dr. Declan Fallon is the Senior Market Technician for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.

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