Within Reach, Again

You can almost feel the opportunity for bears presenting itself again, another in a long line of fumbles since the rally in equites commenced back in February. 

The price action and potential major top in NFLX is helping the cause for bears today in the market's downside reversal to red, as is the soft action in semis and biotechs. Still, we have seen plenty--and I mean plenty--of instances the last few months where bulls quickly regrouped in similar setups to what we are seeing now. 

An uptick in volatility would likely help even the bull case short-term, however if it enables some extended charts to reset themselves. Of course, bears are hoping for an uptick in volatility to signal the start of a rough summer. But one step at a time usually works best in these types of markets. 

At the moment, global materials miners and most commodity stocks continue to outperform. I have spent the morning legging out of some long positions in that complex, careful not to push the envelope too hard just there, given the propensity of the sector to feature abrupt shakeouts. 

Into the heart of the afternoon and beyond, bears will want to pounce on the small caps popping above their 200-day moving average this week, seen below in yellow on the IMW ETF daily chart. 

If this rally is some type of incredible short entry within the bears' reach, again, they will need to reverse this thing back below the 200-day in short order.