Adding a Little Spice

The major averages had mostly been in such benign melt-ups for a while there that it was more fruitful to look below the surface at sector rotations than it was to overanalyze specific price levels on the indices. 

However, recent volatility seems to have added a little spice into the mix regarding those index charts, making it more worthwhile now to check in on some specific reference points. 

Specifically, the IWM, ETF for those small cap stocks in the Russell 2000 Index, gapped down alongside the rest of the tape yesterday morning, down away from the light blue line on the 30-minute chart, below. 

The rest of yesterday's session was spent with various bounce attempts largely failing to get close to the $158 level above. 

And then this morning we saw a post-Boeing/State of the Union bounce back over that level. 

But it is worth keeping in mind that if we are in the midst of a more standard (i.e. not seeing every slight one or two day blip aggressively bought to spark a  run to new highs) pullback or even correction in the broad market, then we should see a series of strong opens, like this morning, followed up by weak closes, as corrective markets are prone to do. 

$157.50 seems to be an intraday support level below which bulls will want to keep defending to stave another a complete fade today.

I still have a few index shorts on, and will likely hold them as long as, for example, IWM hovers below the $158/$158.50 zone.