Selling Accelerates; Measured Move Targets Still In Play

Sellers again stamped their authority on markets with significant pushes lower which completely erased the weak buying of Tuesday. Markets remain on course to reach their measured move targets.  The index closest to doing so is the S&P. 

No surprise to see technicals for the S&P net negative although the index continues to outperform speculative Small Cap stocks. Volume climbed to register distribution, an additional confirmation for today's selling. Once the measured move target is reached - likely tomorrow - next up will be the 200-day MA.

The Nasdaq also took a big hit as it undercut yesterday's selling on higher volume distribution. Unlike the S&P it still has plenty of room to run before it gets to the measured move target or its 200-day MA. A trade opportunity may still be there for those looking for a shorting opportunity.

Small Caps undercut its swing low and finished the day on its 200-day MA. The index hasn't enjoyed the same level of gains as the Nasdaq and S&P, but was unable to escape the selling of those indices. Technicals are net negative, although the trend in On-Balance-Volume has shown stronger selling than the S&P and Nasdaq - not great news if you are looking for the Russell 2000 to lead out a rally. 

It's hard to see thing improving until after the election, and even then, a victory for Joe Biden would probably lead to acceleration in the selling; Democrats are perceived as bad for business and a 'sell the news' event would look to be a more probable outcome, assuming Trump is not re-elected. 

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

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