Low volume selling finds support

A third day of selling for indices saw some preliminary support get tested. 

In the case of the Nasdaq it was converged support established from the January swing high and its 20-day MA.  It did come on the back of a MACD trigger 'sell', but other technicals are in good shape. Plus, there is a new relative performance 'buy' signal relative to the Russell 2000.  There may be a short term 'buy' available given the relatively light selling volume which took it there.

The S&P may have also hit a support level, although it has come a little earlier than for the Nasdaq it has similar characteristics, plus a small doji - dragonfly to add to the bullish picture. As with the Nasdaq there is a relative performance 'buy' against the Russell 2000.

Small Caps also stepped back to its 20-day MA, but selling came with a little more intensity with new 'sell' triggers in the MACD, On-Balance-Volume and relative performance. There is still trendline support to fall back on, but money is starting to cycle into more defensive issues. 

The selling has been persistent, but low key. I'm not sure we have seen anything particularly damaging to established trends, but the Russell 2000 is looking a little more vulnerable than either the Nasdaq or S&P. 

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

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