Hello Friends,
In my typical nature, I was quiet most of last week. However, I liked what the market was doing, checking my phone at the gym and mumbling to myself "burn baby, burn!". Disconnected selloffs between large and small caps on September 19th, when the DJIA made its most recent high, and then increasingly broad based and intense selloffs as the previous week progressed. By September 25th, over 90% of volume on the day was down volume, which typically doesn't happen that often
Of course William Wallace ( I.E. Braveheart) had to find his way into this post.
Last week, I made a video discussing how for the last few weeks, the demand fueling rallies has been weakening, so new buying at current market levels posed a higher degree of short term risk. In English, you might be buying right before a short term correction, and that's no fun.
So it looks like we are again in rally mode, with the major indices up again today. The small cap Russell 2000 Index pushed above its 200-day moving average and gained an impressive 1.47% by day's end. The large cap indexes performed well too.
So what next? Will the Russell 2000 again try to rally, but fail again at its early March high? See the picture below. The resistance point is right around 1210 on the index.
