More Combat in Close Quarters

After an impressive showing yesterday, bulls are suddenly finding their backs against the wall this morning with a violent move lower on the indices in the opening ninety minutes of trading. Dip-buyers have made little in the way of efforts so far today to try to blunt this selling. And now we have the small caps in the IWM threatening a range breakdown after positioning longs for an upside breakout, or at least test of recent highs, with yesterday's strength. 

On the IWM daily chart, updated below, we can see as much, with intense morning selling showing no signs of abating yet. 

At this point, my focus is on gauging any potential intraday bounce attempts today to see just how weak bulls are now. If bounce attempts continue to get slammed, my bias would then be to pick up a large cap short or two, a few of which we will be reviewing for Members today, but mostly to drawn down any long exposure and respect the sudden change in events. 

Also note the strength in Treasuries, with TLT up nicely. Tobacco plays like MO seem to like lower rates and benefit from the "safety trade," as one of our Members, @iuubob, noted recently. 

For now, the IWM combat in a tight range or close quarters continues. But we ought not fall asleep at the switch to a range break, with bears now threatening a breakdown.