Friday’s selling continued into Tuesday, with the experiencing the worst of the losses. Indices are fast running out of support with Fibonacci retracements under threat after yesterday’s losses; this has become most apparent in the but no index is safe. The Russell 2000 is looking the most vulnerable as yesterday’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.
IWM Daily Chart
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 today 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.
COMPQ Daily Chart
The was the only index not to undercut last Thursday’s bullish hammer, although yesterday’s selling does not suggest that bulls are going to see gains today. As with the Russell 2000, we have a bearish technical picture with stochastics in a bit of a no-mans land.
SPX Daily Chart
For today, it looks like we have to favor more losses as bulls still seem to be feeling the pain from Friday’s failings. The only group who can take some solace are investors who are adding on weakness; this again looks like another opportunity to put money to work if the timeframe for holding is measured in months or years.
Leave a Reply