The pre-market optimism didn’t last long, but when markets are coming off an extended high, it’s hard for buyers to return there, even off the back of ’good news’.
The ( ) opened bang on resistance at $237, and then it was all down from there. Volume surged in confirmed distribution, leaving the 200-day MA as the next logical support level.
The has created some symmetry with a second red candlestick, practically a carbon copy in price to the one in October. This has the look of a head-and-shoulder reversal pattern with a measured move target that takes it down to its 200-day MA, and maybe more. However, it hasn’t lost neckline support yet; a rally above 6,755 would negate this bearish pattern.
The took it worse than the S&P 500. A sizable bearish engulfing pattern that resulted in an undercut of the rising trendline leaves bulls in a quandry. Any trader holding a long position since September are likely underwater with their position, which will add to the selling pressure for the index. Similar to the S&P 500, a measured move target will bring it back to its 200-day MA.
Hardest hit was . It gave up 5% on the day, slicing through the spike lows of the past two days and leaving it in a spot of bother. Watch for a bullish hammer tomorrow. The cryptocurrency is heavily oversold on capitulation volume, but catching a knife is always a dangerous thing.
The is another index aiming for its 200-day MA if Thursday’s selling follows through tomorrow. It would take a substantial level of selling to get there, but it would take much more to turn it into a major swing low.
Nvidia’s (NASDAQ: ) results were meant to be the catalyst to bring markets back toward their highs, but instead, it had the reverse effect. Markets were extended, and they are still extended – relatively – despite Thuesday’s losses. Watch for a follow-through lower, likely early next week, that will accelerate things downward. This is not a buyer’s market.
Russell 2000: Small Caps May Drive the Next Leg of Market Volatility
