How Bear You! We Should Be Up 2% Right Now

Seeing the Dow off by nearly two-hundred points early this morning may have been a bit surprising to traders who recently became involved with markets as a general proposition. But, in all candor, it is entirely normal to see some initial backing and filling after the run the senior indices have enjoyed over the last few months. Names like Procter & Gamble Co. (PG) selling off after earnings were initially scapegoated as being a reason for the Dow weakness, but as i write this PG is nearly back to flat on the session. 

In reality, this consolidation should be prove to be an excellent litmus test to see what bulls are made of as we head into the belly of the earnings season beast in the coming weeks, not to mention the dead of winter. Putting TSLA to one side as a special situation short squeeze, the key for bulls will be seeing most software and healthcare/biotech names find their footing quickly into dips in the form of organic buyers stepping in to provide a floor underneath said names--We have a list of names we are tracking closely with Members, such as SGEN in biotech.  

As for the small caps, even though they never became nearly as extended as the larger cap indices we still want to see the initial base hold as support into this "check-back," seen below on the IWM ETF's updated daily chart. We see $166 as the battleground as we close this week out tomorrow, as it is holding well thus far today.