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Indices bounce off support on light volume

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Monday's confluence of support tests was going to bring a reaction and a reaction it did. Today marked the second day of buying, but volume for today was down on yesterday and indices will soon find themselves testing the resolve of buyers of the July high - will supply / sellers return? For the Nasdaq, today's buying was sufficient to regain its 20-day MA with new 'buy' triggers for On-Balance-Volume and ADX. 

Decision time for bulls

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Small Caps have reaches a support level which will determine how things will go for the rest of the year. In the case of the Russell 2000 ($IWM) we have to consider what will happen around $209 as sellers confirm distribution; a loss of this level will end the trading range and project a measured move down and through the 200-day MA. 

Sellers make a strong stand on Friday

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There was to be no reprieve for buyers on Friday. In the past, buyers have managed to step in to provide a bit of gloss on a bad week to give bulls some optimism for Monday, but there was no such reprieve today. But as I was saying about strong days in a trading range - the same applies for weak days too.  The Russell 2000 gave up over 1% in a move which undid Thursday's neutral doji, but with this occurring inside the trading range it's damage is not as significant.  The 200-day MA is fast approaching, so this might be the next test.

Sellers bring havoc to Russell 2000

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Last week's bounce from the swing low looks to be toast with today's distribution selling leaving the Russell 2000 just a few points above that swing low.   The net result from today was to leave technicals net bearish with the lows of March the next target.

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