The Fundamental Things Apply As Time Goes By

Despite AMD GOOGL post-earnings selloffs today we have the likes of NVDA spearheading (watch that 200-day moving average test from the underside) multiple rally attempts in the Nasdaq throughout the session. As it stands now, the Nasdaq is basically flattish-to-slightly-down as we look ahead towards Amazon earnings tomorrow, and then the jobs report on Friday morning. 

That said, small caps are up nearly 1% and giving it another shot as rotation, a widely-anticipated scenario by many market players. 

On the IWM ETF daily chart, below, for the small caps, we can see price pushing back to that 50-day moving average (dark blue line, arrow) as part of a morphing rising channel and also possibly part of a larger topping pattern since November. 

If you look at the bottom pane of the chart you can see volume is running at a light pace, which begs the age-old question of whether light buy volume is actually a bearish tell or not. Bulls are adamant that low volume is a red herring, which bears of course view it as a sign of diminishing buying power on the way up. 

With some of the most bearish seasonality coming up as we move through February, I still view the small cap rotation view as hopeful at best. Failure at the 50-day moving average, with a move back below $220 on IWM would give my view confirmation.