In spite of the fact that the ES has vaulted to a double digit gain this morning…..
…..the small caps, as seen via the /RTY futures, are tumbling.
What is key here is the support zone I’ve highlighted below, The market has tried a couple of times to break beneath the level at roughly 2062. It needs to do this to get things rolling.
The reason is that there is a series of higher lows in place which constitutes the slow walk-up-the-stairs that the bulls have been doing. Break 2062, and we break this series.
The daily bars of the IWM tell the longer-term story best. I have use three tints below. The magenta shows the failed efforts to push the Russell into a persistent bull market; the yellow zone represents the tortuously long range-bound action from last year; and the cyan tint shows the most recent range boundaries, within which we’re still relatively high.
Obliquely related to this, the real estate fund IYR seems to be stalled out just above $110. I am still holding puts on this (September $112) and the long-term bearish analog is still intact.
