The small cap stocks in the Russell 2000 Index (not to mention the transports and homebuilders) continue to lag the market after leading off the November 2012 correction low. After an exuberant futures session last night, bulls were treated to an unkind reversal lower this morning at the open. Caterpillar gave bulls further hope for a rally because the stock was initially higher pre-market after a poor earnings report, often a sign of a tradable bottom. However, the big CAT is currently down nearly 1% as I write this.
On the other hand, strength in giant Microsoft and some areas of the Nasdaq are giving bulls some hope of a recovery into the afternoon.
Overall, though, we are dealing with a choppy market still in correction.
For reference, here are the two monthly charts of CAT and MSFT updated, below. Note that CAT remains under tremendous long-term pressure for a major breakdown. Microsoft, however, is proving to be resilient and likely needs to turn $30 into newfound support for a sustained move higher after nearly thirteen years of fits and starts.
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FCX isn’t looking very healthy, either.
Indeed–not good
IWM puts hanging in there.
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Nice play