Russell 2000 suffers heaviest loss as selling continues
Friday's selling continued into Tuesday, with the Russell 2000 experiencing the worst of the losses. Indices are fast running out of support with Fibonacci retracements under threat after today's losses; this has become most apparent in the Nasdaq but no index is safe. The Russell 2000 is looking the most vulnerable as today's bearish candlestick has the look of a continuation move.
The selling in the Russell 2000 has only just delivered a loss of stochastic midline support which adds to the pressure on bulls and means we are looking at a return to the bear market phase which has dominated throughout 2022.
What makes the market scenario more vulnerable is the drift out of Fibonacci retracement support for the Nasdaq; there wasn't a big undercut of this zone, but tomorrow has to offer some form of rally if a full retracement of the June-August move is not the most likely play for the index.
The S&P was the only index not to undercut last Thursday's bullish hammer, although today's selling does not suggest that bulls are going to see gains tomorrow. As with the Russell 2000, we have a bearish technical picture with stochastics in a bit of a no-mans land.
You've now read my opinion, next read Douglas' blog.
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