A Few Stops Down

The working thesis for bears has been that the early relative weakness for small caps in the Russell 2000 Index in the new year would eventually drag most of the other indices lower, too. 

After a few attempts to squeeze bears highs, bulls failed to hold the mid-point of a well-defined price range on the IWM (Russell's ETF), seen on the update hourly chart, below. 

The failure at the midpoint of this range, a scenario we noted earlier this week, surely galvanized bears to inflict some more broad market selling this morning. 

And will small caps flirting with a bonafide range breakdown below the lower support trendline (lower light blue line) the issue now becomes if that will prove true into a long weekend and as we head into what can often be a seasonally more difficult period for stocks (into February). 

I am looking to see whether these intraday bounce attempts are now soundly stuffed by supply, or if bulls can pull off another stunning bear trap. 

At the moment, some small and mid-cap biotechs in the XBI ETF are impressively outperforming, such as EXEL. Another name we have been tracking is GLPG, easily one of the cleaner charts in the biotech arena. 

More on this and plenty of other ideas in my usual Midday Video for Members.