Sellers keep the pressure on
Today was another day for sellers to keep the pressure on the current decline. The Russell 2000 ($IWM) was able to buck the trend by finishing the day higher but it did give back the majority of its gains by the close of business. The Nasdaq and S&P have room to maneuver before hitting prior lows.
The Russell 2000 ($IWM) is outperforming peer indices but regaining momentum from a 'bull trap' is a concern. However, it's well placed to rally and any gain tomorrow would probably be enough to negate today's bearish looking candlestick.
Losses in the Nasdaq were enough to shift technicals net bearish, which is compounded by the lack of nearby support. It's likely going to take a reversal candlestick on high volume to give us a bottom to this decline as there isn't anything else obvious to lean on.
The S&P is in a similar position to the Nasdaq but it hasn't yet lost its bullish momentum (although all other technicals are net bearish). For buyers of the March reversal the selling isn't yet a concern as many will still be in the green, but undercutting the lows of the heavy volume spike day would change this complexion.
For tomorrow it could again come down to the Russell 2000. If it can firm up a swing low here it could offer traders in the S&P and Nasdaq a reason to mark a bottom. But, with the soft finish across all indices it will be a tough call.
You've now read my opinion, next read Douglas' blog.
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