The Russel 2000 closed below the daily 200 MA today.
It's never a good sign for the breadth in the market when the Russel starts breaking down.
I think there's a strong likelhood we continue to breakdown, based off todays IWM price action.
Small caps got rejected today at the pre market high and just kept selling all day. What makes thing price action bad is...
The small caps are getting to levels when they show value based on earning yields nad based on relative strenghts.
These are the levels we saw before when the Russell 1000 started outperform the Russell 2000. Hence this is showing a potential broadening of the rally and give confidence to traders to not stick to the Mega Caps (FAANGS).
Rather, this is showing...
small caps seem ready to boost higher after this pullback. If it maintains the support it just did this would be past resistance acting as support and we'd be en route upwards to 270 for IWM.
Recovery in U.S. show up slower than expecting, seeing from Jobless Claim report increased to 276,000 against analysis forecast median of 263,250 jobs which is a greater numbers than Feb 2016 report. However the incremental is still below 300,000 which is an acceptable rate. Counting from Jackson Hole Fed's meeting last week statement was given clear of timeline...
Small Caps (IWM) - It seems IWM is having a hard time making it back above the black line (13-year trendline) this week and closed right below the purple line (since-2009 trendline) today. Note that in early January IWM broke below the purple line for the first time and dropped a lot.
