What goes up...
While I didn't post yesterday I had thought yesterday's gains held promise with volume rising in confirmed accumulation. However, today's sharp reversal put paid to those gains. It's not a total disaster, as December swing lows remain intact for the Nasdaq, S&P and Russell 2000 - but the probability of these lows breaking is now significantly higher.
In the case of the Russell 2000 we had a "bearish engufling pattern", but note, this pattern only carries weight as a reversal in an overbought market and we don't have this scenario here (stochastics/momentum is oversold). It does look like the measured move target down is still in play. Once the December swing low is taken out I would be looking for selling to accelerate.
The Nasdaq is trading within a rising channel as opposed to a sideways consolidation like the Russell 2000. Today's losses place the index at support of this rising channel. I still like the idea of a test of the 200-day MA - which would mark a breakdown from this channel. Technicals are mostly negative, with only On-Balance-Volume holding to a 'buy'.
You've now read my opinion, next read Douglas' blog.
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Investments are held in a pension fund on a buy-and-hold strategy.