Small caps were exceptionally strong early in the day, but take note of the breakdown that transpired over the course of the session…….
If you take a few bid strides backward, you can get a better view as to what’s been happening recently: a series of lower highs followed by a “line limit” where selling overtakes buying.
This can be seen even more clearly on a daily basis. The red rounded rectangle shows the trading during the Russell’s highest point in human history. The green rounded rectangle, which is obviously more recent, illustrates a similar range-bound behavior. Importantly, we have broken beneath this range and also cracked the uptrend that was established in mid-March.
Tomorrow’s reaction to the Fed non-event will be key, of course. If history is any guide, everyone will have their thumbs up their nose until the FOMC comes out with their pointless we’re-changing-nothing-but-will-keep-watching press release, after which some dynamism will be allowed to return.