The Appropriate Measures

Revised Coronavirus numbers out of Asia jolted equity futures last night, which seems to be spilling over into the cash session this morning. 

At some point, we knew the market could initiate a shakeout or well-timed rug-pull to keep longs honest after the quasi melt-up we have seen of late. However, as it stands now we have some appropriate measures being taken by bulls. Going forward, I am simply looking to see whether buyers can continue to stand up to the news flow and myriad of calls for a "much-needed," and "long overdue" market pullback into the rest of February. 

Specifically, as seen on the updated 15-minute chart, below, the small caps in the IWM ETF are exuding relative strength to the larger cap indices, barely down as I write this. All things considered, this morning's gap lower in the market is causing nary a dent on the chart. Recall how important it was headed into this week for the small caps to hold up, considering they led lower last Friday. 

But the IWM did a great job holding its 50-day moving average early on this week. And to barely give back anything now would have to be considered a win for bulls, pending the close today and this week.

Beyond the small caps, note the green in large cap names like FB NFLX TSLA, the latter having done an offering, to boot, and is still in the midst of squeezing shorts. 

To be sure, there is plenty of trading left this session to be done before we draw too many conclusions. However, the early edge goes to bulls if IWM resists a rollover after putting in a brilliant last several sessions.