Walk it Back

Despite a sharp post-earnings gap lower for Netflix this morning, taking the leader down below its 200-day moving average, stocks are mostly wanting to stage a bit of a relief bounce. To be sure, more stocks are coming back down to interesting spots, such as the gambling leader PENN down to its 150-day moving average with about two weeks to go until its own earnings report. 

That said, we ought to take things one step at a time, especially since the market may be of the mindset to sell into rallies rather than simply V-shape to new highs, as bulls continue to expect even in the darkest moments. The small caps in the IWM, below on the hourly chart, illustrate this point to some degree. Yesterday's $220 breach led to an immediate slide lower. But today small caps are walking that breakdown back, squeezing back above $220 as I write this. It will be telling, of course, if this bounce can hold throughout the session now. If so, bulls may get a bit more of a reprieve in the next week or two for beaten-down growth and small cap names. 

The other interesting aspect of this morning's open is the strength in precious metals and miners. You will note how little fanfare the gold rally has enjoyed the last few weeks in the face of the crypto craze. I continue to view this as a contrarian bullish case.