____________
The small caps and Nasdaq Composite Index are clearly leading to the downside this morning, which is a troubling sign. Those two areas of the market are usually a great gauge of risk appetite, since they contain the high momentum stocks of fast growing companies. In particular, the Nazzy is printing another big red candle today. The increasing size of price candles over the past few weeks contrasts sharply to the small candles we saw last fall during the slow grind higher.
Although increasing price swings and volatility on heavier volume are friends of the bears, the Nasdaq is still operating not only above its rising 50 day moving average, but also above last week’s support at 2730. Watch those levels closely. Given the increasing selling pressure of late, I would not be surprised to see the bears really seize control for a swift move lower upon a breach of that zone.
____________
the /es is following suit. just shorted some contracts at 1315 ( break of trend line ) for a move to the 1307.5 gap..