Do Not Look Down

This would be the opportune time for bulls to stop looking down, what with the XBI now off nearly 6% (!) as I write this. In addition, the market at-large seems to be buckling under the selling pressure in small caps which we noted out of the gate this morning for Members on the private Twitter feed.

After some choppy morning action, bears are looking to make a move into the final hour here, with potentially too many market players mistakenly inferring that the "pain trade" was higher when it may be, in fact, lower yet. 

On the IWM (ETF for the Russell 2000 Index) hourly chart, below, note the clear downtrending channel in 2016. To keep things simple, it is probably best to avoid playing the long side until that top light blue line is breached. That may seem quaint and straightforward, but in this market environment it pays to keep things simple and avoid the many traps---See TWTR's failed "hammer" from last week, for example.

At this rate, bulls are going to need a nice rally out of NFLX, with earnings tonight after the bell.