The title is not my hopes and wishes, it’s not my prediction, it’s just what it is at this point. Somewhat annoyingly, the market is once again (4 out of the last 5 days, in essence) spending the day rising to form Hammer candles after gapping down to open. It’s the ‘screw as many people as you can’ market.
We have S/T parameters that would indicate a minimum downside projection to the SMA 50, which SPX is not too far above. The parameters have been getting tested all week as the market then bounces back in-day. Semis are still way above the SMA 50 and Small Caps are below it but testing key lateral support.
Could RUT find support first, gaining a tail wind from a recovering Uncle Buck (Small Caps theoretically outperform in a stronger dollar environment)? Sure could. Now let’s watch and see what actually happens.
Either way, the US stock market is only indicated to be on a much needed and healthy pullback at this time. The question is to what pullback levels will it go? There are others below the SMA 50.
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