Good day everyone. At least let’s hope it is considering what
happened on Wednesday. There’s still some carnage out there for many,
but despite Wednesday’s horrific single day selloff – something we’ve
actually seen on many occasions over the last few years – the markets
did come fighting back as expected yesterday. More importantly, the open
ideas we have exposure to here weren’t all that compromised.
Where we go from here becomes the much bigger issue at this point. Although these markets could go either way, if you’re looking to take advantage of the weakness with a bullish bias, now’s probably not the time, not yet anyway. We pointed to the possibility yesterday of roughly 5,921 on the NASDAQ Composite or somewhere right around 2,300 on the S&P 500, but we haven’t gotten there yet, so a little patience for the bulls right now is probably warranted.
Interestingly enough, if we go solely on what small caps are telling us, specifically the Russell 2000 Small Cap Index, the longer-term chart here does suggest higher levels ahead. Not necessarily right away, but inevitably. As you can see on this monthly chart here, the Index has simply found its way back to its 3X3 DMA (blue line).
You can also see this comes after making new highs back in November, as well as spending the last several months sort of consolidating since then. This is actually very bullish to us long-term, because even though the Russell has sort of lagged that of the other major indices over the last few weeks, it does have every technical right to either finds its way below the 3X3 DMA for a few months and then rally from there, or simply start moving higher now that it has consolidate itself nicely.
Where we go from here becomes the much bigger issue at this point. Although these markets could go either way, if you’re looking to take advantage of the weakness with a bullish bias, now’s probably not the time, not yet anyway. We pointed to the possibility yesterday of roughly 5,921 on the NASDAQ Composite or somewhere right around 2,300 on the S&P 500, but we haven’t gotten there yet, so a little patience for the bulls right now is probably warranted.
Interestingly enough, if we go solely on what small caps are telling us, specifically the Russell 2000 Small Cap Index, the longer-term chart here does suggest higher levels ahead. Not necessarily right away, but inevitably. As you can see on this monthly chart here, the Index has simply found its way back to its 3X3 DMA (blue line).
You can also see this comes after making new highs back in November, as well as spending the last several months sort of consolidating since then. This is actually very bullish to us long-term, because even though the Russell has sort of lagged that of the other major indices over the last few weeks, it does have every technical right to either finds its way below the 3X3 DMA for a few months and then rally from there, or simply start moving higher now that it has consolidate itself nicely.
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