06Mar10:37 amEST

Taking Notice of These Moves

The broad market is still giving the look and feel of consolidating recent gains, as the indices pull in to kick off the week. Case in point: The small cap stocks in the Russell 2000 Index gapped below the $138 level on the IWM ETF, a sign in and of itself of a consolidating market with upside momentum on the shelf for now. Moreover, the weak are getting weaker, with GPRO taking a bad chart and making it worse with a further dive this morning. 

Interestingly, while equities correct a bit both TLT and VXX are red, which means that Treasuries and the VIX ETF have yet to receive much in the way of an inverse bid to equites let along any type of "fear trade." Bears will argue this divergence amounts to complacency on the part of market players, but until we see the indices resolve in their favor it is tough to get too carried away with that line of thinking. 

Across other markets, natural gas is quietly showing the best action I have seen out of the commodity in a good while. 

On the UNG ETF daily timeframe, below, note how natty is gapping free and clear away from a cluster of candlesticks representing a potential and rare "island bottom" pattern. There is a gap-fill up to $7.14, after which I suspect we will gains some more insight as to whether this is a meaningful bottom for natty or, instead, just another trip to heartbreak city for longs. 

 

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