Setting Up Camp

After another opening gap higher, one of our Members astutely pointed out that the small caps housed in the Russell 2000 Index seemed hell-bent on rather immediately filling said gap lower. 

At first, it appeared as though the larger cap indices would ignore the Russell. However, once IWM (ETF for the Russell) flipped red, you could almost sense the very short-term gravity of the situation as the larger indices came well off their opening highs. 

Still, as I write this the Dow is higher by triple digits, and bears continue to be prove inept as bringing down the powerhouse leaders in this market, such as AAPL AMZN NFLX, for example. 

Moreover, the continues weakness in the likes of GE is viewed as an anomaly and not some type of major warning sign, but rather specific to the firm itself. Indeed, GE is the quintessential broken chart on all timeframes which can still easily fall into single digits before finding any type of bottom. 

Similarly, former lithium/chemical star ALB is diving again this morning. Back in January, we noted that it was time to move on from the lithium trade and allow the likes of ALB FMC SQM. And now it seems as though the lithium trade needs even more time to correct. In other words, we are still hands off. 

Returning to the small caps, the IWM 30-minute chart, below, shows price essentially "setting up camp" just below the $154 level. 

Bulls have been unable to hold above $154, but bears are not pouncing on this and aggressively rejecting price lower. Thus, one gets the sense that another thrust over $154 should see bulls run.