The small caps in the Russell are leading the indices to the downside, once again. On the daily ETF chart, first below, you can see the initial resistance at the 20-day moving average after the recent bounce-back. You might argue that is a bear flag pattern, though we know how resilient the small caps have been all year. Still, it is tough to get too excited about new longs with this type of action in a leader like the Russell.
Also, biotechs are in danger of breaking back below the key $213 breakout level, as you can see on the sector ETF, second chart below. Also note the spurts of heavy sell volume in recent months after a monstrous multi-year bull run. The likes of AMGN BIIB CELG GILD are all mature and late-stage here, in my view.
On the long side, keep an eye on recent IPO’s QUNR ZU for strength out of their current setups.
What are you trading this morning?
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Nice picture…I mean of the woman…the charts…not good for biotechs, but I think nice buying opportunities will come out of the drop. What do you think?
Has been for a few years. Will be interesting to see how this one plays out.
Break below 1772 in SP500 could lead to a potential 6-10% draw down
Fair point
Not eager to get burned shorting into year end but i’m short right now : )
Tough to get burned in the snow
Chess, I know that this is a laughable hobo trade, but PAL is looking somewhat friendly to me…
Unc, you have always been a good PAL to me.
I’m committed to the casino stocks for 2014 with my favs LVS and MGM (has moved pretty fast and the option pricing and volume for this Friday is rediculous..)
Like it
next support @ fib 1746 SP 500
Agreed
DZZ snowing here on the NShore of LI