Welcome to a new week, everyone. And since our overlords at the Federal Government haven’t created another holiday (like The High Holy Cabbage Festival) we actually get a full five days to trade! Thanks, fellers!
Looking at the small cap futures, it seems that we’ve got a nice steady selloff, which is pretty encouraging at first glance.
A longer view is somewhat more troubling, at least in the short-term. There’s plenty of opportunity to a bounce back up to the principal topping pattern. Such a bounce would be awfully annoying, but after examining the situation thoughtfully, I’ve concluded the market doesn’t care if I’m annoyed or not. Not even a little bit.
To be sure, the top shown above is a ally of the bears, but we’ve got a much bigger challenge ahead in the form of that far larger bullish base. I confess, things were looking awfully exciting there on Saturday with what was going on in Russia, but the entire situation reversed in the span of hours. I’m not the conspiracy loony like some Slopers, but honestly, the whole thing seemed as contrived and phony as a 8th grade play. It just doesn’t pass the smell test, so I think something else is going on.
Strangely, after the civil-war-that-almost-happened, every single future was bright green on Sunday. As of now, about half an hour before the opening bell, markets are pretty much unchanged. I believe the second chart in this post is the key for the moment with respect to crucial support and resistance levels.
