If I had access to the CEO of Pfizer, a giant vat of their blue pills, and a pool queue, I would have a good chance of exacting revenge for the ridiculous insanity that took place on Monday morning. I’ve never traded Pfizer in my life, but obviously the cute stunt they pulled had a worldwide effect on all assets. Now, a few days later, almost all of the thrill is gone.
What I’ve been watching most intently is the small caps. I took the snapshot below a little before the open. It’s quite clear that the level at about 1717 is very important for support, because it keeps banging on it. Half an hour into the open, we did break it, but as I am typing this, we are zipping off of it again. Someone does not want this line to fail.
Stepping back, you can see quite plainly the end of last week, the soul-crushing explosion that took place on Monday, and the reversal pattern that’s been forming for the past few days. A resolution failure at 1717 would be a welcome change.
Stepping way, way, way back, to view the Russell 20000 cash index, you can see how we double-topped (note the red circles) and are currently sky-high with respect to valuations. It goes without saying that a breakdown from these levels would be a tonic for my spirits.