Check Out This Descent

The small caps now likely (once again) hold the keys to the kingdom for this market.

Their bullish divergence to other major averages earlier today may have led to the minor bounce in the tape we are seeing as I write.

On the 30-minute chart for the small cap ETF, below, I am checking out whether well-defined support (lower light blue line) since Monday can now hold for the highlighted descending triangle.

That is the clear level against to trade/watch today and beyond, just above $104.

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Obligatory post…

“Now yousszzzzzzzzzz can’t leave.”

After cutting losses quickly in TKMR and JO longs just now, I am down to my CORN WEAT longs, both of which I have some profit cushion on from my original entires into then.

The Dow Jones Industrial Average daily chart has the look and feel of a crash, though small caps and high yield bonds are slightly diverging intraday.

My biggest position is cash and I am content to wait this out.

Stay safe out there.

The intraday triangle on the S&P we looked at this morning has now morphed into a larger one, with price near the morning lows.

It pretty much goes without saying at this point that oversold markets which fail to bounce are most in danger of a crash.

Again, I do not use that word lightly. But facts are stubborn things. And this market has been unable to hold a bounce for a while now.

Ebola plays continue to trade in their own world, with the President now canceling campaign events for Cabinet meetings.

Keep an eye on the descending triangle resolution, below.

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I would have expected buyers to show more sense of urgency to rush in off the sidelines this morning from the huge move lower.

Instead, we are drifting across the board, with the indices threatening to head back down to morning lows.

I am still focused on Ebola plays and avoiding other equity longs and shorts for now.

Netflix earnings after the bell today may be a clue as to whether the marquee issues take us next.

I am keying off the SPY 5-minute chart since the open.

You can see a triangle forming higher lows but lower highs. Whichever way this breaks should lead to the next market move into the early-afternoon.

What are you trading this morning?

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